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Advice Team Responses
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Family Issues: Personal Loans |
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I let my friend and his wife borrow $2,500 more than a year ago. They are making payments as agreed, but I can't help to get annoyed when I see them spending money frivolously. They even went on a trip recently - I can’t even afford to do that! What can I do about this situation? -Susan |
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Susan,
While you may not agree with all of their spending decisions, at least they are keeping their promise to pay you back.
I believe that when you lend someone money, it is important not to assume a position of power. Being too authoritative could damage your friendship.
Good luck,
The Advice Team |
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In October, I loaned my friend of 12 years $4,000. I wrote her a personal check for the amount of the loan. She verbally agreed to pay me back all of her income tax refund. Well, she got her income tax and spent it all, without notifing me. I called her and she said that she would pay me $100/week until balance was paid. That was three weeks ago and I haven't heard from her. I am a single parent and trying to go to school. She knows I need it. What can I do? -Cathy |
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Cathy,
I am sorry you are dealing with this delicate issue.
Since your friend has not kept her end of the bargain, it is past time that you begin treating the loan like you would any other business matter. Discuss the terms of the agreement and put the details in writing. Be sure to list both parties involved, the interest rate, due dates, payment amounts, and penalty for late or missed payments. Document the date and time of any letters or phone calls, and be sure to make note of all the responses to your attempts. Your records may be necessary if you plan to take the matter to court, or if you plan to write the debt off as non-business bad debt on your next tax return.
Good luck,
The Advice Team |
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Recently, my sister asked to borrow $2,000. I live in a different state and I am concerned about her ability to pay me back. Besides, I don't really have the extra money - I am a single parent! She's put me in a very uncomfortable position and I don't know what to do. -Anne |
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Anne,
Although borrowing money is usually done with the best intentions, lending money to friends or family can put you in an unfortunate situation of being left without your money and possibly your relationship. Before agreeing to any loan, try opening the lines of communication. It may be that your friend would be better off by working with a reputable budget counseling organization. Sometimes, saying “no” is the best thing you can do for someone.
Good luck with your decision,
The Advice Team |
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