Long story short, my best friend (over 20 years) lets me know out of the blue that he is in some serious debt (~15k). He's about to finish up school but has yet to secure a job. Having no income, he needs money for the immediate future (350/month rent, 350/month minimum cc payment). While I would love to swing him some money and help him out, this is a lot of money per month and Im not entirely convinced he is really changing his ways significantly. He still goes out with friends, buys a few video games, etc. To me, this begs the question, you cant pay your rent (like, actually cant come up with the money to), but you havent shut down your social life or landed a job yet. All, advise is needed. Ill likely help him out for a month but I cant afford to keep doing this, and just need some rational thoughts in my head. Were truly good friends and I want to help, but he has put me in a bad spot and my position is clear, but I dont want to come off like Im freezing him out. Oif.

11/28/2010 4:10:53 PM

have him show you a budget of why he can't afford things now - i recommend using mint so it shows actual expenses instead of something he makes up and shows you - you can setup mint in less than 30 minutes and maybe another 30 or so to setup a budget on there

once he shows you why he can't - if you are convinced that he needs help - then help him - hopefully though instead it helps show him that he can afford his own purchases

11/28/2010 4:16:36 PM

Never ever loan money to friends. If I was gonna do it I'd just give him the money and tell him if he decides he wants to pay me back one day he can, but I'm never going to ask for it back.

11/28/2010 4:17:29 PM

Well -- I think he was able to for a long while by digging deeper. He just contacted me about 2 weeks ago (we live in different cities) letting me know that we was unable to rent/minimum payment for the end of the month. And even if that's true, it upsets me that instead of paying 200 of the 700 required, and asking for 500, he went ahead and asked for the full 700.

11/28/2010 4:19:01 PM

Does he have things he can sell? You can move an xBox & games pretty quick now that Craigslist is popular nearly everywhere. If he's not willing to make those kinds of sacrifices then I'd say no. If he's willing to do what it takes to get through the remainder of his schooling then maybe.

[Edited on November 28, 2010 at 4:26 PM. Reason : l]

11/28/2010 4:26:11 PM

Don't ever buy alcoholics a drink.

I know it's your friend, but until they have made changes in thier lifestyle to help themselves, your money is just a temporary crutch to prolong the inevitable

11/28/2010 4:28:20 PM

I wouldn't loan him the money. He should be able to find some POS job to cover $700 / month especially during holiday season. It's not like he's asking you for a one time loan to help him get back on the feet. He's essentially asking you to cover his expenses for an indefinite amount of time. He lives in a different city so you have no way of monitoring his spending. If he's blowing any disposable money on crap you'll get pissed pretty quickly and it will probably end the friendship. He could try asking his CC company for forbearance or see if his roommate/friends/family will let him stay some place for free. Otherwise, just tell him to stop making the cc payments and just worry about covering minimum living expenses.

11/28/2010 4:31:15 PM

I just gave my friend cash today and he gave me a check for the same amount and I'll just cash it when he has it.

but I would never given it to him if I really expected to get it back. I'm sure he will but I won't lose any sleep over it if it doesn't happen right away.

your friend really does need to learn a lesson, make some sacrifices and figure it out on his own or he will never learn. Growing up sucks.

11/28/2010 4:36:09 PM

Quote :

"serious debt (~15k)"

Quote :

"about to finish up school"

Quote :

"havent shut down your social life or landed a job yet"

That much debt is going to take longer to pay down than you want to be involved in his finances.

I'd offer to help him budget/plan, as a friend, just to share the burden/stress of it all, but I wouldn't get into a long term financial arrangement. Maybe spot him for 1 month so he has time to make some plans, but no more, and be clear about that up front. I'd do it with no strings attached other than encouraging him to use it wisely. You probably don't want the resentment that comes with telling him how he has to live, especially not long term. Be there for him as a friend, not as a bank loan agent.

Does he have parents than can help out? Or who have a room he can move back into rent for a few months rent free while he looks for work? If he does maybe you could offer to rent a U-haul and help him pack. There's no shame in bouncing back home for a while if that's what needs to happen, not in this economy.

[Edited on November 28, 2010 at 4:49 PM. Reason : .]

11/28/2010 4:41:16 PM

didn't read the thread and i don't intend to...because what it always comes down to is:

DO NOT lend a [friend]* money unless you're willing to be totally cool with not getting it back...ever

*replace [] with pretty much any person you have a personal relationship with

11/28/2010 4:49:03 PM

The living arrangement is another gripe of mine, he signed a year long lease with a roommate in june (you know, 4-5 months before being totally out of money). Given his personality, he's not going to take financial advise from me and I cant convince him to do anything. With that said, I dont want this to be the breaking point of our friendship but I think his financial expectations from me are unreasonable and Im not willing to make a 700/month commitment to him (which impacts me), if he hasnt exhausted more resources (part time job, not going out, etc).

11/28/2010 4:50:59 PM

ive done this for one of my best friends / ex. it always becomes a point of argument. i still do it because im a caring guy and hate seeing her go through rough times (personal + financial), but i wouldn't recommend it to anyone else.

[Edited on November 28, 2010 at 4:54 PM. Reason : havent put myself into debt doing so, but have lost lots of savings.]

[Edited on November 28, 2010 at 4:54 PM. Reason : and no, dont expect it back. just bringing it up is an argument starter.]

11/28/2010 4:54:16 PM

Tell him you can't afford to help him.
Then go buy a new BMW and post pictures on Facebook.

11/28/2010 4:55:42 PM

Here's the plain and simple fact of the matter. He should go to his bank or credit union and ask for a line of credit, loan, etc. If said financial institution denies him, then they (the experts) have made the determination that he is probably not reliable to pay back this money. If anyone (including you) is dumb enough to lend him money after he gets turned down, you're probably never going to see it again, and you're probably going to lose your friendship over it.

11/28/2010 4:57:47 PM

YOU ARE NOT A BANK. DON'T LEND/LOAN JACKSHIT.

you will be fucked in the end.

11/28/2010 5:08:54 PM

This would by an iffy situation with a solid friendship, with someone who lives nearby, and who is completely willing to engage in the budgeting and being frugal. The more you talk about this, the more red flags are everywhere.

You said he's finishing up school. What's he studying? What are the job prospects in that field?

11/28/2010 5:10:49 PM

http://en.wikipedia.org/wiki/Bankruptcy

11/28/2010 5:32:13 PM

mint.com, line of credit, DO NOT LOAN HIM MONEY

11/28/2010 6:18:27 PM

Danger Danger Will Robinson.

Everytime I hear this brought up its only bad news. Dont do it.

You wanna help? Set him up with a credit councilor (like a financial advisor) and help him look for a job.

11/28/2010 6:21:12 PM

don't loan it to him. if you want to help then give it to him. if he wants to pay you back then great. don't expect it unless you want the friendship to end

11/28/2010 6:23:56 PM

Absolutely not. If he's an able-bodied male, he's in a pretty good position to get a holiday retail job.
If you loan him money, you'll probably lose both the friendship and your money permanently over this.

I once loaned $100 to a friend to buy something because she forgot her wallet, and I'll be damned if I ever see that again.

11/28/2010 6:47:26 PM

Sounds like he wants you to be his sugga daddy

11/28/2010 7:48:47 PM

there are plenty of restaurants that he could get hired at....

don't give me that no one is hiring bullshit

it might not be work he likes but $$ is $$

11/28/2010 8:05:42 PM

only loan money to people you want to go away.

11/28/2010 8:47:51 PM

its been said before but id say just give money to friends, if they pay you back thats cool but don't expect anything


when it comes to my friends i'd never loan out more than what I was comfortable with never seeing again.

11/28/2010 10:09:26 PM

horrible idea. it will make your friendship awkward and you probably wont see your money again

11/28/2010 10:12:43 PM

you are not a bank

just say no

11/28/2010 10:51:50 PM

i paid my best friend's tuition last year (basically a brother, parents passed a way 2 years ago in an accident and the dude has had it rough). my take on the situation was that i would do it but only if i was comfortable with just giving him the money. if you aren't ok with losing the money and writing it off as a gift you shouldn't make the loan.

(my friend paid me back when some financial stuff was worked out just like he said)

all that being said though, $15k isn't that crazy for a student loan. if he is talking about student loans he should be able to pay that off without your help. If he is talking about credit cards... well I would stay away unless you don't plan on seeing your money again.

11/28/2010 11:15:07 PM

You can have your student loans deferred until you find a job. Whats up with the 350$/ mo. credit card payment. Its his own damn fault for getting that far in debt which shows he probably wont be responsible enough to pay you back or get a job for that matter.

11/28/2010 11:19:15 PM

I was actually thinking of offering one of my cousins a free room in my house if he'd use his time here to finish his degree at NCSU until I read this thread.

Now I'm sure I'm going to offer it to him.

11/29/2010 4:04:41 AM

If you help him, make 110% sure he realizes it's one time, and realize you will never see the money again. I agree that it doesn't sound like the guy is being that careful with his money and you are probably putting off the inevitable unless there are circumstances you don't mention here (like the credit card debt being medical expenses) and the guy really is being careful.

11/29/2010 7:30:57 AM

where are his parents/family in all of this? if they're not alive or wealthy enough to help then I understand but if not, it should be a clear sign that if they don't trust him to give/lend him the money then nor should you. like everyone else itt has said, give it to him with the expectation of no return but if he's a real friend he'll pay you back quickly and likely with interest

on a side note my dad lent his best friend 10,000 and he died in a car accident, a few days later my dad got a call that he had taken a life insurance policy out on himself for what he owed my dad and so my dad got paid. that's real friendship if you ask me. (no, it wasn't a suicide. bad accident involving many people and a drunk driver, was all in the papers)

11/29/2010 7:40:54 AM

I'm usually a sucker for being nice to people and sometimes, not all the time, it comes back to bite me. That being said, and if it was my friend of 20ish years, I'd give him a (relatively) small portion just this once for about $350 knowing or expecting you wouldn't get it back, but appreciative if you do. Tell him you are also not swimming in money either but that's what you can do to help. After that, especially after you mentioned his current living habits not exactly being frugal, you will be able to tell from his response and whether he will ask for more money whether he's truly a friend.

11/29/2010 7:42:05 AM

If you really really really want to do it, but you're worried about not getting your money back, then have a contract drawn up and try and get a parent to cosign.

That will either have the person decide not to ask you for money or they will go along with it and at least you have that over their head.

11/29/2010 7:54:46 AM

Skack, I've always fantasized about one day being in a position to do that. You should definitely do it!

Colemania, so he is graduating this semester? That's great!!! If I had the money, I'd hook him up for the month of December just to make sure he makes it through exams comfortably. After that, he's got a college degree, no job, and 15k in credit card debt...that's how thousands upon thousands of people graduate, and they make it work.

You seem like a really nice guy who has done most of the financial things in your life right. You gotta understand that there are plenty of people who do things wrong, and the consequences, while they may be horrifying to you, are actually okay. If he refuses to get a job and gets evicted or has creditors harassing him, it is not the end of the world. You can help him move his shit out overnight or help him sell his Xbox/whatever on craigslist or lend him a suit for a job interview...

11/29/2010 8:03:46 AM

No, at this point there is no help beyond damage control. He might have a shot if he can take out more student loans, have him go apply for more immediately. Call the credit card company and ask if they can temporarily reduce his minimum payment, some will let you pay zero for up to six months. Does not work if you have already missed a payment.

^ and in this narrow instance, Bridget is right.

[Edited on November 29, 2010 at 8:16 AM. Reason : .,.]

11/29/2010 8:13:15 AM

If you feel like helping a friend in need out and can part with the money, then do it. But don't ever expect to see it back. And don't bother asking for it unless you are prepared to have the friendship fail and end.

I've lent 'friends' some money before. I looked at it as buying them out of my life because I pretty much never heard from them again. In hindsight and seeing where they are with their lives now, it was some of the best money I've ever spent.

11/29/2010 8:27:31 AM

Just to add...I lent a good friend a substantial amount of money ($10K) to start up his own law practice. I got a few payments at the beginning, but I saw how much he was struggling to get by (anybody who has any experience or been around someone starting a law practice can relate), so I didn't force any more of the payments on him. It's now two years later and I'm about to get all back in lump sum (plus a little extra).

What is your financial situation?? I lent my friend $10K, but I had another 20K in savings after that, so even though I was still lending him a lot of money, it wasn't going to put me out (although it did make things tight when I went backpacking in Europe for a couple months then came back and recently tried to purchase a house while trying to get my own practice started). At least with my friend, I was helping him on a venture to make money that he would eventually pay me back with. He was valedictorian of the law class and a very gifted individual. He money problems were multiplied by the fact that he had just gone through a divorce where his wife got pretty much everything. Your friend's money problems seem to come from being young and immature.

I'm usually for lending money, because I'm just too nice and don't like to see friends suffer. But I don't think I would do it in your situation. Especially after seeing so many kids struggle the way it seems your friend is struggling (just finishing school and not being able to find a job in this shitty economy).

11/29/2010 8:37:33 AM

Quote :

"where are his parents/family in all of this? if they're not alive or wealthy enough to help then I understand but if not, it should be a clear sign that if they don't trust him to give/lend him the money then nor should you. like everyone else itt has said, give it to him with the expectation of no return but if he's a real friend he'll pay you back quickly and likely with interest"

Some people just have fucked up parents. Mine wouldn't lend me money if it would save my life (I've had to put off medical treatment I couldn't afford). Hell, mine won't repay me what they owe me knowing I need it really fucking bad.

[Edited on November 29, 2010 at 8:39 AM. Reason : ....]

11/29/2010 8:38:44 AM

OmarBadu's idea of having this friend show you a budget (such as on mint.com) is actually the least likely to cause any major issues, especially if said expense/budget report clearly shows it is his own behavior that is causing his financial issues. If he really is just in a bad spot, and needs 2-3 months of help, and you can afford to do so, cool. If he's just being irresponsible with his money, then he can't blame you for not coming to his rescue.

However, friends that "expect" their better-off friends to bail them out of their debts, or ignore their friends discomfort in this sort of situation, really aren't going to be great friends much longer. I've had this happen with friends AND seen it happen in my own family. If they are not responsible enough to handle their own livelihood, then they are not responsible enough to accept your reasons for not "helping" them.

11/29/2010 8:52:44 AM

McDonalds is always hiring. I know it is cliche, but it is true.

He can make enough to pay his $350/month rent there. And it doesn't have to be permanent. In fact, it would be incentive to actually make an effort to find a real job instead of begging friends for money.

11/29/2010 8:54:41 AM

Quote :

"Some people just have fucked up parents. Mine wouldn't lend me money if it would save my life (I've had to put off medical treatment I couldn't afford). Hell, mine won't repay me what they owe me knowing I need it really fucking bad."

while my parents are great and would help me out to the best of their ability if i ever NEEDED it, i think it's pathetic for people to think that their parents OWE their ADULT children any support

obviously every situation is different, and yeah, i'm coming from a situation where i know i can ALWAYS count on my folks, but i totally get position of parents that kids are cut off to sink or swim after a certain point

11/29/2010 8:56:12 AM

^^^^I'm sorry to hear that about your parents and totally understand, I meant to avoid coming off as insensitive about that type of situation.

Another option for this guy would be to sublet his apartment and stay with somebody else (for free or less money) in the area. If he goes out, surely he has friends that he could stay with there right? He may even be able to talk to the apartment complex and get an extension or break the lease on a half month rent penalty or something. If he has friends or relatives to stay in the area this would be a particularly attractive option.

As others have said he could contact a debt consolidation company or attempt to do it himself, get student loans or sell stuff. I guess you could actually take some stuff as collateral, that might be a better option.


[Edited on November 29, 2010 at 9:03 AM. Reason : ^]

[Edited on November 29, 2010 at 9:04 AM. Reason : .]

11/29/2010 9:00:39 AM

Quote :

"their parents OWE their ADULT children any support "

I hate siding with lewoods in any instance, ever, but I don't believe that is what she meant here.

for example, there was a family trust in one side of my family, with instructions that it be distributed to the grandchildren when they hit 25. Never happened, and I don't think it ever will. THAT is being owed money by parents.

11/29/2010 9:04:18 AM

Just don't do it. You'll regret it later.

11/29/2010 9:14:04 AM

...addition vote for: HELL NO.


(I've done it more than once, and really fucking regret every single time.)


Don't do it.

11/29/2010 9:18:42 AM

Do not lend.

I have given friends/family money, some of them thought it was a loan. I never had an expectation of getting any of it back.

One chunk helped pay off debt/fines of a sleazebag dating my sister. The fallout convinced her that he was a sleazebag. Best money I've ever spent in my life.

Expect no repayment, and then do what your heart tells you.

11/29/2010 9:33:16 AM

Quote :

" for example, there was a family trust in one side of my family, with instructions that it be distributed to the grandchildren when they hit 25. Never happened, and I don't think it ever will. THAT is being owed money by parents."

This, only slightly different and in multiple circumstances. Sucks to learn the hard way more than once that your parents don't give a shit about you.

11/29/2010 9:49:14 AM

I do not loan money to anyone that I would not be willing to write off as a "gift"/helping them out. If its an amount that you would be uncomfortable never seeing again do not loan it.

11/29/2010 9:57:02 AM

You don't ever lend a friend or family member money, you give it to them and hope to get it back.

Never lend more money than your friendship is worth.

11/29/2010 10:01:38 AM