When people are lent money, it is with the assumption that they are going to pay back what they have lent. This assumption is rather mistaken a great deal of the time. People may keep borrowing money and rack up countless debts over the years. Official lending institutions tend to have trouble getting money back from those who borrow it despite more resources, so normal people who lend their family and friends money are going to have a lot of trouble getting the money that they are lent back.
Lending Family and Friends Money-You’re likely going to never see that moneyagain.
It is hard to see those close to us struggle and need, as they rather turn to us, for help. Often times, many of us feel sorry, and lend some money to help get back on their feet. Thinking that they are going to pay us back when they have gotten their life straightened up. And some of them do, but it is a naïve assumption a lot of the time. As once you lend money to family or friends, the chances are that they may decide to keep using you as a lifeline to bail themselves out of trouble grows.
It is highly inadvisable that you lend any money without any way to legally recoup what you have let people borrow and that more often than not means a legally binding contract. A contract with promises and terms when to pay back is actually a good way to ferret out those who are honest about paying you back when they have the opportunity and those who are just out to use you astheir own personal ATM machine.
Many family and friends who you lend out money tend to get very offended when you gently ask them to repay what they have borrowed. Many of them pull out the, “you should have just given you the money out of the kindness of your heart” card. So obviously one might see them getting offended at the possibility of a contract.
Of course, one may argue that it’s not a good idea to lend money to those that you know personally, as you might feel obligated. And obviously, if you need the money after you gave it out, then that is going to put you in a tight bind. We should feel bad for the situations that people were in, even though a lot of the times, they got themselves in said situations because of mismanagement of money.
In the end, it is unwise to lend money without any kind of legal backup and even then, it can lead to something rather ugly if you have to drag a close one to court to get your money back. Which is why it just leads to a lot less headaches and bad feelings if you just tell them that you’d like to help them out, but you cannot afford to lend them money. Which in many cases might be true. Many friendships have been destroyed, families have been torn apart over the almighty dollar sad as it is to say.