Lending Friends Money

Discussion in 'Teacher Time Out' started by JustMe, Apr 15, 2012.

  1. JustMe

    JustMe Virtuoso

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    Apr 15, 2012

    This is the second time we've needed to lend money to the same friend. He's a wonderful person and is in a bad situation (cleaning up his parent's financial mess, which is messy in part because of his mother's disease). He's hard-working, trustworthy, and so forth. We are glad to do it, truly. And he doesn't ask casually...it pains him.

    But this time was a little more than last, and it got me thinking about The People's Court. :haha: Over and over and over: put it in writing! But I could no sooner ask him to sign something saying he is borrowing x amount of dollars and will repay than I could chop off my leg.

    So my question is, do TRUE FRIENDS AND CLOSE FAMILY MEMBERS really put these loans in writing? Have you ever been involved, and if so, how is it not horrible awkward and or insulting?

    I would honestly just prefer to lose the money than say to him, "Sure, we can lend you the money...but could you just sign this first?" If I didn't trust someone to repay a loan, I can't see myself ever agreeing to it.
     
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  3. czacza

    czacza Multitudinous

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    Putting it in writing is a good idea.

    My SIL borrowed some $$ from us years ago and kept telling us 'the check is in the mail' when it came time to repay. After several months of nonpayment, i asked my sister's husband who is a lawyer to send SIL a letter outlining her obligation to pay. That got things moving.:D

    Sadly, SIL moved on to 'borrowing' from other family members and friends.
     
  4. JustMe

    JustMe Virtuoso

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    Yes, yes...it's a good idea. Just not one I think I could actually execute. :)

    That's too bad about the SIL. Did you have any seed of a thought that she might not repay?
     
  5. Aliceacc

    Aliceacc Multitudinous

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    The one doing the borrowing is the one who should suggest putting it in writing.
     
  6. donziejo

    donziejo Devotee

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    It is a good idea to put it in writing. However, I'm like you JustMe, and it would be impossible for me to actually ask a good friend or family member to sign an agreement. I lend money very cautiously and with the thought that if I don't get paid back it won't hurt me to lose it.

    Sorry, about your SIL Cza. I have a DIL that I won't lend money to. If I have it and she needs it I stipulate it's a gift. She never pays anyone back. It's so annoying. But she is the mother of my grandkids. Thankfully my other DIL is an angel.
     
  7. czacza

    czacza Multitudinous

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    It was a learning experience...she manipulates her parents...no one else deals with her anymore...she LIES convincingly and has gotten money from people by pretending she needs expensive, experimental meds for a disease she doesn't have. It's disgusting.
     
  8. JustMe

    JustMe Virtuoso

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    Good point. But, hmmm...how do I say this? I don't think that would ever cross his mind. He's a good ol' country boy who knows darn well every penny will be repaid...for him to think to write that down is unlikely simply because it's so obvious to him. And if he did offer, I wouldn't sign unless he outright insisted.

    Note, I have no hesitations or worries whatsoever in this situation. But it just got me thinking. There are people I would want a signature from, but those people probably wouldn't ask for money from me in a million years. :)
     
  9. sue35

    sue35 Habitué

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    Apr 15, 2012

    Honestly if I was lending money to a friend who is in a bad financial state I would assume I would not get the money back. I would make sure I lend out an amount that I could afford to lose. If they pay me back ( which I would assume my friends would) then that is a bonus. But I also could not bring myself to make them sign something.

    I do think that they should bring up signing something, however. I would hope, if I was in that situation of needing money, I would do that.
     
  10. Upsadaisy

    Upsadaisy Moderator

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    Just watch Judge Judy. You'll never lend to a friend again.

    There is no insult intended by putting a loan into writing. It is a legal contract. Terms for repayment must be included.
     
  11. JustMe

    JustMe Virtuoso

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    Haha! I can't much take her yelling, but I know what you mean! :)
     
  12. Ms. I

    Ms. I Maven

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    I've never had to loan anyone a big amt of money ever, but yes, I agree that having them sign something quick that I'd type up is an excellent idea (amount, date to pay back, whether in installments or lump sum). It's like how peole planning to marry if they have substantial wealth will still sign pre-nups. I mean yes, they love each other, but it needs to be done & is an excellent idea.

    And sometimes it's just better to GIVE someone money, so there's no hard feelings, arguments, etc. about always trying/hoping to get it back. It depends on who you're loaning to.
     
  13. Irishdave

    Irishdave Enthusiast

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    William Shakespeare in his play Hamlet wrote,
    "Neither a borrower nor a lender be,
    For loan oft loses both itself and friend,"​

    My parents always made me sign a promissory note whenever I borrowed money from them. so why not friend?
     
  14. JustMe

    JustMe Virtuoso

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    Really?! That not my parents had money to lend, but I know they wouldn't have had me sign anything.
     
  15. JustMe

    JustMe Virtuoso

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    Had my husband asked me to sign a prenup I would have been...upset.

    It's in the thousands, so we're not willing to just gift it...but I understand. He will be able to repay in just a few months, but if he were in a horribly desperate situation, then we might just give without the expectation of repayment.
     
  16. Caesar753

    Caesar753 Multitudinous

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    When I lend money to a friend or family member, I always assume that I won't get it back. It's nice when I do get it back, but I don't expect it. I don't want to ruin a relationship over a few bucks (or more). If I have the money to share, I'll share it.

    With that having been said, I do think that "putting it in writing" is still a good idea, I think because it reminds the person borrowing that you're doing them a favor and that it's a bit of a hardship for you, even if you're happy to do it. I can see how writing up an actual contract could be awkward and whatnot. I wonder if it would be enough to simply have the information in an email or something....? Something like, "Yesterday we talked about you borrowing $1,000 from me. We agreed that you will pay me back $100 per month for the next ten months. Do I have that right?" I bet if you saved that email and their response, it would cover you in the event that you ever needed to bring the issue to court. I could be mistaken, though, because I'm not a legal expert.
     
  17. Speechy

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    I don't lend with the expectation of being paid back. If I give someone money, no matter the amount, I don't consider it a loan. Most friends have insisted upon paying it back though, which is just fine by me.

    I give my friends money because they ask, really need it, and more importantly; I honestly don't mind giving it or helping them out. That's why I have a job, to make money so it will be there when I need it or someone I know does.

    But I agree with the majority here... If you feel like the money lending is going to be an issue, definitely get some kind of writing/contract that states the terms of the loan.
     
  18. JustMe

    JustMe Virtuoso

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    You all are nicer than I am! :) I expect the money back.
     
  19. Speechy

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    Apr 15, 2012

    Can I borrow $10? :D
     
  20. Irishdave

    Irishdave Enthusiast

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    The hell with $10 ----- I'll take a $1,000 :lol::lol:
     
  21. Catcherman22

    Catcherman22 Companion

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    Apr 15, 2012

    ^^^This
     
  22. Proud2BATeacher

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    My parents lent my aunt our college fund. It was NEVER paid back. I would only lend money if I could afford to lose it (and possibly lose a friend over it)
     
  23. smalltowngal

    smalltowngal Multitudinous

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    I've never loaned a friend money, not because I couldn't or didn't want to but because they've never asked. We have borrowed money from my parents before. My mom kept a running total of how much we owed, but never pressured us for repayment because she knew that we would pay her back when we could; however, when she passed away my dad became like a loan shark in trying to get us to repay it. We have since repaid it, but him constantly asking if we could give him some money has put a kink in our relationship. Now the tables have turned and he's had to borrow money from us. I take the same approach my mom did. I'm not going to bother him for it and if he pays us back, he pays us back.
     
  24. Ima Teacher

    Ima Teacher Virtuoso

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    I've never loaned or borrowed money from anyone other than my parents. My parents have borrowed from me, and I've borrowed from them. We always put it in writing. Amount, dates, terms of repayment, etc. It's not that we don't trust each other, but you never know when something else comes up.

    I'm having a big house remodel project done, and it's doing to cost close to $10,000 by the time I'm finished. My money is tied up, so I can't simply write a check. Mom paid the money, and I'm repaying her as I'm able to liquidate funds. Mom knows that I will pay her back. However, if something happened to me, she would have no way to get her money back without a contract. With a contract, whoever was taking care of my estate would be able to pay her the money she's owed.
     
  25. stephenpe

    stephenpe Connoisseur

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    My grandmother taught me a huge lesson with words.
    Never lend money to someone you cannot afford to just give
    them.
     
  26. JustMe

    JustMe Virtuoso

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    I can afford to outright give him the money, but...uh, it's a few thousand dollars and I want it back. (And he will return it, as he has in the past.)

    You all are far too generous and are making me feel like a meanie! :haha:
     
  27. Rebel1

    Rebel1 Connoisseur

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    Off the subject...BUT I was just wondering.....
    Did Judge Judy have a face lift or something?
    Her face looks like it has been pulled back, etc.
    Rebel1
     
  28. JustMe

    JustMe Virtuoso

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    Hmmm...don't know. I'm pretty loyal to Judge Milian. Although, she's kind of always had a harsh look about her.
     
  29. Rebel1

    Rebel1 Connoisseur

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    We are going to be in trouble for hijacking this.
    Sorry y'all,
    Rebel1
     
  30. JustMe

    JustMe Virtuoso

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    No, no...we won't be in trouble. I was just curious about this topic. Plenty of responses! :)
     
  31. Speechy

    Speechy Comrade

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    Judge Judy is irritating and never lets anyone talk. I like Judge Alex though!
     
  32. Upsadaisy

    Upsadaisy Moderator

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    I love Judge Judy.
     
  33. lucybelle

    lucybelle Connoisseur

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    I think it makes sense. This is a little off topic but if my boyfriend and I get hitched I plan on having him sign a prenup. Not because I don't trust him, but just in case. I'd have no problem asking someone to sign a paper for a loan if it was a large amount. It's not saying anything bad about the person, it's just to cover your butt. Sort of like you don't put on a seat belt expecting to get into a high speed crash, you do it just in case.
     
  34. Blue

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    I was an only child. Not that I borrowed money from my parents, but if I did, I was not treading on troubled water. I, however, borrowed money from my grandparents. They loaned money to earn a living. So, signing a paper was expected.

    I have loaned money to several people. One repaid it next payday. The other is still struggling. But, she makes a payment every month or so. I am like many PP, I never loan more than I can afford to lose.
     
  35. amakaye

    amakaye Enthusiast

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    I think there's a big difference between not loaning more than you can afford to lose (just in case of some strange turn of events) and not expecting to be paid back. I'm with you, JustMe--unless there were extenuating circumstances, I would want to be repaid. :)

    I have loaned money to my brother and my parents. While we didn't sign anything, my mom kept a paper tracking the amounts as they paid it back. I think it was Ima, though, who brought up a good point of having a record, just in case something would happen, if it were a larger amount...
     
  36. Speechy

    Speechy Comrade

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    What have you decided Justme?
     
  37. JustMe

    JustMe Virtuoso

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    Oh, there was no decision to be made...done deal. I just posted out of curiosity.
     
  38. JustMe

    JustMe Virtuoso

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    I thought it was clear in my original post that we had already happily agreed to lend the money and that I was just curious if others had friends sign anything simply because I wouldn't/couldn't... But I went back and reread the OP and I see I wasn't clear. Sorry. :)
     
  39. Speechy

    Speechy Comrade

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    Oh okay! Sorry about that. I thought you were trying to decide to whether or not to have it put in writing.
     
  40. kpa1b2

    kpa1b2 Aficionado

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    Both my parents & my grandmother loaned me money to help pay for my undergrad. I signed papers for both of them. Eventually my grandmother forgave the loan. I paid my dad off. Since being married I don't think he asked me to sign anything, but those loans were much smaller amounts. He's kept a list.

    I know that when we needed money we asked DH's mother for a loan. She couldn't help us as she had helped her sister. Her sister could always afford to go on expensive trips & cruises, but couldn't pay regular bills. Funny thing is that was probably 15-20 years ago. We just found out why she couldn't help us at the time. DH's mom had to hound her BIL after her sister died to get her money back.
     
  41. stephenpe

    stephenpe Connoisseur

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    SPeechy, I used to despise the lady and then read her book (an old one) I swear she is much more civil now or the book made me look at her in a new way.
     

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