We met a and assisted someone who recently borrowed £20,000 from her friends and relatives by asking, “can you give me money please”? She also had a further £30,000 in unsecured debt to credit cards and personal loans.
Asking friends and family to “give me money” is understandable when times are tough financially but what happens if a friend or family member does give you money and you can’t repay them?
Because the availability of credit is harder to come by people are also asking friends and family to borrow money in their name. The money is then repaid to the friend/ family member each month. However, who is liable and what happens if you can’t repay the debt?
In some debt solutions your friends and family will not get all of their money back, which is why we’re explaining the process.
Give Me Money: Borrowing money from friends or a family member
When things get tough financially there’s often a friend we can rely on to help us get to the end of the month, every now and then. It’s cheaper than borrowing money from a payday loan or credit card company.
But, what happens if your debt situation is far worse and you’re not trying to borrow £20 but instead it’s a lot more? Your friends and family may have the money, but can you realistically repay them?
If interest and charges have grown too large then you may be in a position to borrow money from friends and family to pay your debt then repay them each month. However, if your debt problem is too severe it’s often best to seek professional debt advice from a charity.
Remember, if you borrow money from a friend or family and then enter a debt solution they may not get all their money back. We can explain fully and in-depth what this would mean for you. To speak to a debt advisor at Debt Support Trust please telephone 0800 085 0226.
Give Me Money: Borrowing money in a friend or family member’s name
If your friends or family don’t have the money to lend you they may borrow the money themselves to help pay off your debt. In exchange you would repay the money each month. This could be more affordable for you, however, it can be a problem in the long term.
At Debt Support Trust we are helping increasing numbers of people who are repaying friends or family who have borrowed money to help them out of debt. The friend or family member is then liable to repay the debt.
Often people not only owe their friend or family member but also credit cards, overdrafts and personal loans. A friend or family member is considered as a creditor in a debt solution, like the credit card company or bank. This can mean that debt solutions are more complex because a friend or family member may not be getting their money back as previously agreed, or worse still, they may not be entitled to get all of their money back at all.
Borrowing money from friends or family is a sensible solution to dealing with small debts, however, if the debts are larger or there are multiple different creditors then they may not get all of their money back. It can mean a difficult decision at a later date.
If you have serious debt problems and need help then Debt Support Trust is here to offer help and guidance. Our telephone number is 0800 085 0226.
You can also phone us if you have lent a friend or family member money and need help and advice.