Reply With QuoteAh, why not just take the pi$$ instead?Originally Posted by Rob Leeds
When in doubt, ask a stranger on the internet
(Mark Twain)
Ah, why not just take the pi$$ instead?
When you look long into an abyss, the abyss looks long into you.........
That's one thing I'm definitely not doing.
Lending money to someone you could lose as a friend or family member is something serious to think about.
It may be a case of dammed if you do, dammed if you don't.
It’s a direct family member, the money is a significant amount to me and them, may no be to others on here, i was just wondering if anyone goes wrong what i could do about it, I’ve read through the comments and have a good idea, hopefully its nothing too long term and it’ll all work out...
Again thanks all...
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Last edited by Martylaa; 14th December 2020 at 09:06.
I'm sure all this wisdom relates to watches too, anyone lent out a watch never to be seen again?
If I may say, this post feels like there is trepidation and concern, you say its a significant sum on your part so you'll only worry and fret until its paid back, also its a significant sum for them so what are the chances of them being able to pay it back.
Only you can decide, but if you have any doubts just make an excuse that you cant help them..
If it's a close family member would you want to persue a legal route if required.
Does taking their lifestyle into question give you doubts.
How did the question of a loan come about.
Would you lose this person and others as friends if you declined.
Interest rates are as low as they've ever been so why not a bank loan
Last edited by Rob Leeds; 13th December 2020 at 23:53.
Don’t do it plain and simple!!!! I’ll admit to being gullible on this one, not a family member but a partner that pleaded with me to borrow £9500 and lend her it to pay her debits off and I did. Fast forward to her not speaking and being frosty now a year down the line I moved out this weekend having taken lots of things into consideration I decided I’ll just take the loss. Her parting shot was “no court in the land will make me pay you”. So just refuse, if they care for you as a person they won’t be bothered no matter how desperate they are. It’s your choice but you’ll probably not be told the whole story by someone that’s after money.
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Interest rates are only low for the people that the banks want to lend to. 70 to 80% are not uncommon even with a guarantor for some people. See my last post to find out why I know that.
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Realistically I think you have to accept that if they don't repay, the money is gone. Yes, you can have a legally binding agreement in place, but if they don't repay are you going to enforce it? You can't get blood out of a stone so are you prepared to bankrupt them if it goes wrong? Money gone...relationship gone as well.
You might say, yes, I'd bankrupt them. But if you're like most, probably best to either not lend the money, or lend it and be prepared to wave bye bye to it if they don't repay.
If it’s a significant amount get a deed of trust Drawn up, maybe even try to secure it, problem is that if you ever need to enforce it you’re in trouble
I'm guessing it was credit cards, store cards that were owed.
We all do things with our heart rather than our head and have to learn the hard way some times.
never allow anyone to owe you money. i had to learn the hard way
What all too often happens in these situations, is that when the money is not repaid the person who lent the money is made to feel bad and at fault for wanting it back. I know this from experience.
Started out with nothing. Still have most of it left.
General question -- If the family member owns their home and doesn't pay could you (providing you have a written agreement/contract) put a charge on their home? If so would the charge accrue interest or would that need to be part of the contract? For example if you loaned someone 10k and they failed to pay but sold their house 10 years later would you still only get 10k or would you get 10 compounded at the rate of inflation?
As with others if you want to loan the money, do, but only loan what you can afford to lose and be happy never seeing again.
The first thing I should say is that I wouldn’t do it. This is because I was naive when younger, and I’m now middle aged and a little twisted by experience
Loans are cheap at the moment, and so I would have to ask if they had tried more conventional funding channels. If they had, but they had been tuned down,then it would suggest that they were not a good risk.
If I did lend, and I almost certainly wouldn’t, it would need to be money I had no need of, and I would protect it by securing it with collateral in some form. Considering the cost of that legal agreement, and the risk to the borrower, they wouldn’t bother.
I think it’s very easy to lend money for noble reasons yet find that has been forcibly converted into a gift when the repayments stop, and you are made to feel guilty for asking for it back.
Dave
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If you lend money to someone you care about you need to do it fully accepting you are unlikely to get it back.
If you are comfortable with that then fine but don't then get bitter if they can't or won't return the money.
As someone mentioned it might be easier just to gift the money and not call it a loan.
I would find it difficult not to help out if I could. But a cautionary tale about not documenting it properly as a loan not a gift (whether you get the money back or not):-
My uncle died about 35 years ago - he had given his daughter some money to help her out as her husband's business needed some funds to tide them over a rough patch. She understood it was a gift but her brother believed it was a loan and should form part of their father's estate - nothing was written down. Cue massive falling out and sadly the brother (who is very wealthy and the sum involved would be loose change to him) still won't speak to her to this day. They were close before this happened. Money can sometimes cause real problems in families.
Maybe Mick could opine?
This every time. The person borrowing the money often ends up feeling bitter about having to repay it. The person who lent the money ends up feeling guilty asking for it.
No win situation.
Started out with nothing. Still have most of it left.
The paths to family falling outs are paved with good intentions.
If it's not your kids then don't do it. If it is your kids give them the money, it will save any bad feelings.
Remember the old saying ?
No good deed goes unpunished.
My sisters husband passed away this year from Covid19. Apart from the obvious grief she was worried about money in the short term as she was retired and his income had of course ceased. They were worth more than a few bob but little or nothing in liquid cash. I offered to bung her 50k temporarily, a very significant sum for me, but I knew 110% she was good for it with multiple large life insurance policies due to pay out, a cottage in Padstow, classic cars, expensive watches etc etc to sell also. She graciously declined and most of these things have now paid out or been sold as appropriate and she is financially secure.
I have other family members I trust personally every bit as much as her, but none I would lend this money to. For her it would have been a short term stopgap, but for someone that needs it to start or expand a business, or clear debts, pay penalties, whatever, then no, strictly no. I could not afford to lose this money or them.
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have they got anything you could take as insurance against the loan? Nice rolex or two perhaps
A lot here saying if you lend it be prepared to lose it???
We're talking about a family member, so if the money has miraculously been forgotten about then in my eyes that relationship would never be the same again, its easier to lose a friend in said situation but not so with family, if its been LOANED it has to be paid back to maintain the family set up..
I "loaned" a grand to my wife's "best friend". It's still "on loan"! .......................
I believe that would be an example of taking a lein against their property, thus encumbered it would show up when they tried to sell it and a title search conducted, I don't know about the interest chargeable on the original loan amount but by the time this stage is reached it's Lawyers and all the fun, likely additional expenses, entailed. Who needs that kind of aggro.
I've only loaned a few hundreds here and there, so far it's all been repaid.
Use your best judgement or just say no.
Yeah - I just see hassle in any arrangement.
The OP says it is a sizeable amount to each of them - that being the case, I'd be wanting to hang on to that money for any of my own unforeseen problems.
I'd be saying "I don't have the funds available to help you out, sorry."
A sister/brother might be seen to be a known risk (as you should surely know them by now) BUT - their husband/wife may determine whether you get the money back or not.
If you 'lend' it as a kind of 'gift' - they'll probably be back for more later.
Never let anyone know you have money to lend is best practice IMO. I made the mistake of lending a mate money once to cover a gambling debt...... 3rd and last time recently i have told him I cant aid you anymore. Youre on your own!
Declare poverty at all times, thats my approach now.
There are positives, the family members involved have had a rough year for one reason and another and telling them the loan was now a gift finished there year off on a very positive note and it also made my wife very happy being able to make them happy, I shed a few tears in private though :)
Seriously to cover a gambling debt, c'mon what can you expect and 3 times...
I have seen the results of lending (sometimes substantial amounts of) money to close friends or family several times. Not one of them ended well.
Don't do it.
It's a difficult one to balance because it would be nice to help if you can, but the obvious risk is that you loose the relationship and the money.
Could you consider giving them a smaller amount with relaxed or no terms? Could you help in any other way? i.e. with your time, knowledge, experience etc. Do you know what they propose to use the money for and what they are doing to get themselves out of the situation? How would they propose to repay the money, is that plan feasible.
Good luck in which ever way you go.
Seriously to cover a gambling debt, c'mon what can you expect and 3 times...
Yeh not ideal! I think we all have that one mate we would help cover their arse though.I have done my bit and know I can recall a favour if ever needed
Looks like most people have had bad experiences or would advise against it. I had a positive experience i might add. I asked a family member for a 5 figure sum which they lent me and i haven't had to pay it back - result!
we dont talk anymore but its a small price to pay
:-)
OK, understood.
If you feel you need to put this is writing, then you realise that at some stage you may need to enforce repayment. Doing so will destroy any relationship that you have and you still probably won't get your money back.
May I respectfully suggest the following wording:
"Dear <Family member>,
We've been looking closely at our finances and I'm sorry, but we can not afford to loan you £<amount>. I know you need this, so what we could do is let you have £<more comfortable amount> as a gift. If you're not happy accepting this as a gift, then pay us back as and when you're able, but we don't expect you to.
Best of luck,
Martylaa."
I hope that's a joke!
Good advice.
The advice is in the thread already.
1) A formal contract with an agreed repayment schedule. You can write this yourself. The key will be make it watertight by having a couple of wintesses sign it. Witnesses should not be family members.
2) A lein in the loan agreement entitling you to take posession of something tangible that the family member owns If they default. (Note they must own it and you must satisfy yourself of that. Also that it's not security already or risks being seized by bailiffs.) Ideally this security is worth the value of the loan.
3) A clear understanding is needed between you and you need to make clear that this money is essential to you as well and that you need it paid back. You also need to make it clear that if it is not paid back you will have to take steps to recover it.
Failure to do any of the above and you may as well treat the money as a gift, As most have said that's what it will become. Sorry to be so blunt but nothing will divide a family faster than money.
If the family member is already in debt and you are being asked to "make a problem go away" with a loan then my advice is walk away or give the money as a gift.
'Judge Rinder' would be a good place to research this subject.
Probably based on the joke:I hope that's a joke!
If you lend someone £50 and you never see them again.......................................
It might be the best £50 you've ever spent.
I have at times helped people out that were family or friends. When times were good this may have involved what to some is a substantial amount, to others less so. I have always taken the approach that I was gifting them rather than loaning and that mindset allowed me to not develop regret or any form of resentment. It also took a lot of pressure off people that were reluctant to ask for help. Some may feel that is the attitude of a mug who could be taken advantage of. I have always viewed it as the right thing to do. Things are tough at the moment with illness and uncertainty workwise, but I know that if I need anything I will have support and good will. That is enough for me.
The OP may be in a different situation and clearly has had to think about the best way to help someone out. The very fact that he is looking to help someone out says something about the type of person that he is to me, a decent fella. There is not enough goodwill in the world at the minute and we should be looking to help and support people, particularly friends and family. When all is said and done that is all we have (and dogs)
If you are a very wealthy individual, just give them the money and tell them not to ask again. Unless you can afford to lose it, please think long and hard and expect to either lose it or for things to go sour. I know and someone very wealthy who lent his sister a large chunk of money and they cannot pay it back. They are now barely speaking and even though he has no need for the money he feels resentful. It will end in tears unless you can say be prepared to accept the loss with a smile k owing you helped them.
It has to be given in your head, if it comes back due to honour then consider it a bonus. If you may need it then you should keep it- you earned it.
Back in 1973 i lent my brother 10p, he spent it a couple of fruit salad and black jack sweets and a dib dab, never seen it again! b-stard!
Well just wanted to update this, everything’s all good, I got my money back and the family member got past Xmas and a very tough spot and hopefully 2021 will be a better year...
Appreciate all the advice given and I will say I can breath easy again...
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Very glad to hear it
Good news to hear.
Excellent, I’m glad it’s all worked out well.
I really don’t understand some of the earlier comments though. I can understand if a family member has just conned money off another, but if I was in a position to lend money to one of my brothers when they were in need, or to help them achieve something then I would have no hesitation in doing so, and would expect the same in return. And whilst I would never expect to draw up any paperwork between my family members, I would always suggest that others consider it.
It's just a matter of time...
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