The world of money and lending and lending, it is not just limited to banks and loan companies, credit cards, node-to-node lending, and credit card accounts. Borrowing money can also be closer, such as a family member or close friend asking to borrow money.
In some cases, it can be a large sum of money. It is one thing to borrow a family member or friend, 10 or 20, 100, which is the amount that goes there, for a short period; say a few days or weeks before they get paid. Company payroll in bankruptcy, lending large sums of money, hundreds, if not thousands of pounds a friend or family member, is another matter.
My position on this has not changed over the years. If you borrow some money, be prepared not to get it back, and also be prepared for possible loss of friendship. Nothing divides people faster than money.
Am I cynical?
Maybe, but also, after years of experience.
If you really want to help someone who needs loans, for any reason, you can’t be better off guaranteeing loans for them. This way, they can also build a credit history. You will be responsible for loans on the day if they do not make a payment, but there is another way to help someone, without a transfer of money.
If your friend or family member is a bad or bad credit, sending them to various forms of bad credit loans, there is another way to help them.
Here are some examples of what we have heard over the years:
I loaned a friend a large sum of money about a year ago
The loan was meant to be a temporary loan and has tried in vain to get my money back. My friends ignore my calls, text messages and emails, but have recently told me that they are in the process of bankruptcy.
Where can I stand if they owe me money and are now seeking a corporate bankruptcy? Can I get my money back? Can I go through the court system? My friend doesn’t want to talk to me and I need the money back?
Unfortunately, if “friend” goes out of business, you are unlikely to get your money back. Bankruptcy pay will be listed on the creditor, and if there is no cash property, you will get nothing. You can get yourself listed as a creditor in their bankruptcy, if they haven’t already.
If the person giving money is money, they will be liquidated in bankruptcy and distributed to the people they owe. In most cases, there is not much to give back to creditors.
When you lend money to someone
it is good to have a written document outlining the terms of the loan and also repayment information. This may seem clinical and business, as it is, it may also give you some opportunity to collect the debt would be a friend or family member who is not paid.
Include proof of debt / loan so that the bank / lender can use the courts to manage the collection of debt. This can cost you money, court fees, however, if the amount of money you need to collect is quite, it may be worth the extra cost.
However, some people just asking them to sign a quick loan document can be offensive, in addition, it may feel difficult to ask them to do so.
It does not help much if the person was going to pay in bankruptcy, not just a document acknowledging debt, because the creditor should be given other ways to collect the debt. Of course, the process of collecting the debt can alienate your friend or family member and that takes us back to the beginning not to borrow money from friends or family members in the first place.
In the past, when we have seen large amounts of money borrowed from friends or family members was to buy a property or start a business.