Favors That Can Be Financially Fatal

financially fatal favorsAt some point it’s likely that a friend or family member will ask you for a financial favor. When this happens, you may genuinely want to help or you may also feel pressured to do so. In either case, you need to take the time to look at the financial favor being asked and determine if it can end up being financially fatal to your own finances:

Lending Money: It’s important to remember that the instant that you agree to be “YouBank” for a friend or family member, you’ll instantly change the nature of your relationship with the person borrowing money from you forever — and this change is usually not for the better. Even borrowers with the best intentions can

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5 Responses to Favors That Can Be Financially Fatal

  1. Clever Dude says:

    When a friend was willing to loan us some cash for our first home purchase (he offered, so we accepted), I made sure to write up a legit contract with a specific repayment term and penalty for not paying it back on time.

    He wanted to refuse the contract on grounds of friendship, but I made him sign it. I didn’t go the extra step and get it notarized though.

  2. ~Dawn says:

    I would agree with clever dude- A contract should be used even with family members.
    A friend of mine got a collection agency to bug her sister to pay her back- she had a contract, that was notorized. She had told her sister that she was tired of bugging her about the money and if she didn’t pay her back she would get a collection agency to do it for her and her sister didn’t believe her.

    She paid her back just to get them to stop calling.

    I don’t know if I could do that with family, maybe ‘friends’ or co-workers.

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  4. Tod Hillman says:

    If I were to let a friend use my home address to obtain a credit card because they claim it’s easier to get credit in California than Utah, would that put me at risk?

  5. pfadvice says:

    I don’t see it putting your credit rating at risk if it is applied for under his name, but if there is ever any trouble, your address is where the collection agencies will start. I’m also not sure if it is legal putting a false address on an application – you would have to read the fine print.

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