Lend money to family or friends.
Based on the emails and social media notes I receive, the topic of lending money to family or friends comes up regularly. This is usually when I hear about a family member or friend who burns himself after a so-called “social personal loan”.
It really depends on the situation. If, for example, your brother’s truck breaks down and he can’t afford to fix it, but needs it for work, that’s a good cause.
On the flip side, if your brother needs a bailout after a tough weekend at the tables in Las Vegas, it’s a cry for help, and a loan just might make matters worse.
A while ago I asked a guarantor – who sees the scenario of lending a family or a friend all the time – what he thought of lending money to people you know.
His name is Adi Dzebic and he owns the Bail Bonds Network in Philadelphia. Here is what he had to say.
“We see this problem daily as family and friends seek to release loved ones from prison,” Dzebic said. “This is a sensitive and urgent situation where time is running out. People often quickly make the decision to bail out someone they know and don’t think too much about it, until it is too late and ‘they be forced to pay the full dollar amount of the deposit. “
Dzebic especially sees problems with boyfriends or girlfriends bailing on each other. “The relationship turns bad and all of a sudden people want their money back and they don’t mind seeing their loved one go back to jail,” he said.
Family members often put property and other assets as collateral to bail out their loved one.
“If the released person misses a court date or violates any of their release conditions, they may return to prison and the supporting family member may lose the assets they have pledged as collateral, or may at least see additional charges, “Dzebic added.
Sometimes it makes sense to help a family and a friend if you know their financial situation and their ability to pay you back.
“If this is the case, clear conditions must be defined and signed by both parties,” said Dzebic. “Documentation is essential, especially with people at risk who may not return the money. “
In some cases, Dzebic recommends that family members seek emergency loans so that the person can finance themselves instead of relying on family members.
“With sureties large amounts can be at stake – we are talking about collateral,” he said. “Sometimes we don’t even want to deal with girlfriends who bail out their boyfriends because too often we see relationships deteriorate. All of a sudden we are suing all parties on their terms.”
So, setting the conditions and signing the documents helps, but many people who cannot live up to their verbal agreement will not respond to the documents either. “You will have more success in the courts to hold them accountable, but a courtroom is not an option for small dollar amounts,” he added. “Is it worth spending your time, legal costs, and effort to get that $ 250 to $ 500 back?”
In Dzebic industry, people are signing over $ 5,000 to $ 50,000 liability to bail out their friends and family.
“But a lot more are in danger for them and things don’t always go well,” he said. “You are essentially risking your own
financial freedom and assets to make sure someone meets their bail conditions, and that’s asking a lot. “
Wise words indeed, from a surety who knows a thing or two about lending money to family and friends – because he has seen a thing or two about lending money. money to family and friends.