I’m between a rock and a hard place and I just don’t know what to do? A close friend of mine is in trouble financially and like we were a couple of years ago, he is close to losing everything.
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I have known my friend for a number of years (probably since my early twenties) and although we don’t see each other much nowadays, we still speak regularly on the phone and I class him as someone who I can speak to openly about most subjects.
My friend is self-employed and over the last 12 – 18 months’ his business hasn’t been going too well. With the lack of work, pressure to pay the bills and not knowing when things would start to pick up he started using his credit cards more and more to keep his head above water.
Once the credit cards had been maxed out he then took out a personal loan (he has always been credit worthy) to clear the cards and try to get back on track. Problem is, he didn’t get back on track.
After using up all of the loan he then went back to using the credit cards, and then payday loans. To makes things so much worse is that he didn’t tell his wife about any of it!
This was three months ago.
I met up with my friend last week and I could tell something was up. After spending a few hours with him catching up, he finally came clean and told me everything! At first I was annoyed he hadn’t come to me before (especially as I’ve got experience of this situation) but I did understand.
He explained that he was in serious trouble financially and that the red letters, court action and bailiffs were inevitable. He had told his wife and she told him that he just needed to sort it out.
I tried to give him advice such as talking to the people he owed money to and come up with a repayment plan but because he had let it get so bad, the only option he has left is to come up with a rather large amount of money. If he doesn’t he will most probably lose his car, his business, and his house. He really is in trouble!
So why am I telling you all of this?
Well this morning I spoke to him and he had some good news (if you can call it that). One of the serious debts he owes (around £7,000) needed to be paid off by next Tuesday. If he couldn’t then court action would proceed.
After taking my advice about speaking to them they have told him that if he can pay £4,000 off by then, they would be willing to put the existing £3,000 into a repayment plan.
Now before I move on with this I just need to point out that although he does have other debts (around £12,000 in total) they aren’t chasing him like this one is. I also know that although his work has been quiet, in the last month he has started to book more and more work in. The problem is (he’s a tradesman) that he won’t get paid instantly.
So anyhow, my friend has until next Tuesday to raise £4,000. He has spent the last few days trying to raise as much as he can but has come up short. £2,400 short to be exact. And he has asked me to lend him the amount he is short…
This is where I am at the moment
A few years ago I didn’t have a penny to my name. I was completely and utterly skint! And as it is well documented on this blog, it has taken a tremendous effort to turn things around.
As of today I am still in debt. Not much mind you but a bit.`
I’ve also got some savings which me and skint mum have been putting away for emergencies.
When my friend asked this of me today it’s not like he automatically expected me to say yes (I haven’t said yes or no yet). He asked me because he’s in trouble, I’m his friend, and he would do the same for me.
I’ll be honest and tell you that my gut reaction was to give him the money there and then. I believe he has realised things need to change in his life like they had to for us, and I believe he will pay me back as soon as possible.
Problem is, it’s a big chunk of our savings. It’s taken both Naomi and I months to accrue that money. And what happens if I need that money. What happens if there is an emergency, or an unexpected bill I need to pay?
But he is my friend. And friends are important, right?
I really am between a rock and a hard place of what to do?
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Amy Livesey says
I would say what my Grandma used to say about friends and money/things. If you aren’t prepared to give the money as a gift then don’t give it at all. It sounds like your friend is in trouble and it could take him yeaes, and possibly more mistakes, before he sorts this out. It could cost him his marriage etc etc. If you are not prepared to give him the full amount as a gift how about a smaller amount like £500 (not that we have that much money floating about either). I would say your friendship is more important than the money. If you are a good friend you will give what you can (if you are able to at all) as a gift. If he is a good friend he will understand why you say no (if that’s what you decide). Keep us posted!
Kats says
I think personally yes u would like to help your friend but if he has so many debts u don’t want to.lose all yr money as well.u could help him with half but then he still.might not have enough to pay u back.if he can’t pay u back your friendship might be at risk as you will keep asking about when your getting yr money back.before it got so bad he should have found other work too or called the companies to explain.it’s up to u as u say it’s difficult for u.I have had money problems on the past and my parents helped us out but they do keep reminding us about the money which is embarrassing or they say to people where paying for their shopping as they don’t have any money.I started paying them back every week then my hubby lost his job but hopefully he’s working again now but when I had to stop payin them back i felt terrible.but only u can decide what to do.some people u can keep helping and they don’t really help themselves.I know people who are always skint but don’t try hard enough to achieve anything.sorry if I sound rude or hard.
Wean says
It’s hard, but no, don’t do it. You will feel awful but how bad will you feel when you want some of your own money for your family and your friend can’t give it to you ?
You have done a tremendous job together with your wife getting out (almost) of a dire financial situation, don’t throw it all away because you feel sorry for someone. You are a great role model for him to look up to and see what can be done with effort, not just asking for handouts.
I also think you probably would have a difficult time getting it back (or any of it), just look at your friends previous track record of paying back loans/cards etc. etc., he just gets deeper and deeper in debt.
Why hasn’t your friend done more to help himself ? i.e. any job however small would have helped him, i.e. collecting supermarket trolleys, cleaning, stacking shelves ?? all honourable jobs, instead of waiting for business to ‘pick up’ ?
No SD – don’t do it.
Sue says
As other posters said, you can give your moral support and act as a role model- and if you do offer any, make it an amount you can afford to lose as you probably won’t get it back!
Don’t feel guilty-your first allegiance, and in fact your only financial responsibility, is to your wife and family, not your friend.
lesleygcooper says
Goodness, what a flipping awful situation. I have lent considerable amounts of money to friends and family in the past. Sometimes I got it back, 3 times I haven’t. It was a LOT of money, to people that I thought were close enough not to stitch me up. But they did. They say they feel bad about it, but that doesn’t get me back that cash. Fortunately, we are perfectly fine without it, although there were times we really could have done with it.
So, I would suggest that your friend may fully intend to repay you, but you need to be prepared that he may not. What would that mean for your friendship
I must say, I don’t envy you this. What a difficult thing
Ricky Willis says
Hi Dave,
Debt is a priority but we have frozen interest so although paying it off is paramount, making sure we have a healthy emergency fund is also something we’re focusing on too.
Ellen Nixon says
I know it seems harsh but you need to look after you and your family
Ricky Willis says
Not harsh at all. I value your thoughts, thank you
Ricky Willis says
He works as a tradesman. Work can be good one month then dire the next!
Ricky Willis says
Thanks for this, really helps
Margaret Neeson says
Three questions
Can you afford to lend the money
Can you afford not to get it back
Do you want to lend the money
In as much as we like our friends and would try to help as much as we possibly could but when you have been in the same position and know how hard it can be to get your head above water again do you want to take money away from your family when you know how much you have gone through to save it .
Is there a way that maybe you could help him find a debt councillor and go with him for support help him to work out a weekly budget for food etc.
I hope this all works out for you and your friend. Meg
Ricky Willis says
Thanks for your thoughts on this Meg
Ricky Willis says
Hi Oli,
The more exclamation marks the better – don’t worry.
We came to decision in the end not to lend the money to my friend. We are still friends :)
Ricky Willis says
Hi Jeremy
The decision was taken to not lend my friend the money. We are still friends, so this hasn’t affected things.
I will see if I can find the right words to explain why this was our choice – give me a bit of time…
Ricky Willis says
Cheers Oli