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Reclaiming lost money
By Mr. Stupid | March 20, 2008
If you’re a pretty responsible adult who watches his finances and prepares for things, then you’ve probably been in the same boat I am in: You’ve probably lent friends money. And now you want it back.
Loans to friends usually range from the tiny (Hey, can I bum $20 for gas?) to the distraught (I need $150 to put my dog down!) to the absurd (My PayPal account is empty and I only have 1 day to pay $75 for that Hulk crap on eBay). Small incidental loans like these don’t really count as lending money. They’re like payday loans without the vig. You know you’re going to get it back in a week or two.
But sometimes, friends recognize that you are a person of means — or rather, you are a person who never seems to need money — and they ask if you can help a brutha out in more substantial ways. Or sometimes, you open your Stupid puss and offer the damn cash.
In my case, I lent Jay $1200 so he could relocate to a new apartment. Jay has 3 kids and works two jobs. The old apartment he lived in had a level 3 sex offender in the same complex. And then I also lent Are $500 when he was out of work due to diabetes complications. I guess I’m a pushover.
In both cases, I lent the money without establishing any conditions: I didn’t ask when they would pay it back and I didn’t ask for any interest. With no termination date, no doc, and no juice, these are what bankers would call high-risk, low-return loans.
I suppose I could have deflected Jay and Are to Prosper, or given the “Jeez, what are you gonno do?” shrug. I just recently had to do both of those things. Another friend, Ess, is getting a liver transplant and will have to pay something like $4000 out of pocket. And then there’s Bee, who just quit his job and owes $1800 in back taxes. During these conversations, I did my due diligence in my head and calculated Ess and Bee as bad risks.
But I determined that Jay and Are were good risks. I went ahead and approved the loan. Thankfully, both Jay and Are are back on their feet (swollen as they are), and I finally figured out how to get some of my money back.
Windfall from the government
I’ve been friends with Jay for more than 20 years. I can tell him when his pits stink or when he’s acting too gay. If he gets uppity, I can remind him of his first wife. If he’s feeling a little blue, I can remind him of his second wife. But I still feel a little funny asking him for my money back.
So, last week, I called him and we got talkin’. The conversation turned to the tax rebate. I reminded Jay that he would be getting a nice chunk of change: Jay has a wife and at least two kids.*
(* I say at least two kids, because one of his kids is his wife’s from a previous marriage. Another of his kids from his previous marriage. He has two other kids with his current wife. So I don’t precisely know how much he’s gonna get, but I figured out he’ll get at least $1800.)
So I said, “Hey, Jay, I gotta buy a new car this summer. How much of that rebate are you gonna donate to the Mr. Stupid car fund?”
Without missing a beat, he said, “I was actually going to pay you back sooner than that. Our tax refund is bigger than I thought, so I’ll have that for you real soon.”
Payday! $1200 in the bag. The check arrived last Thursday.
Emergency fund
But my relationship with Are has waned. Not gone sour; it’s just gotten distant. I rarely talk to him any more, so I am rarely in a position where I can even bring up the loan. Funny thing is, I remember when I handed him the money, I didn’t want him to feel embarrassed so I gave him a stack of 20’s in an envelope. Now I’m the one who’s embarrased to ask for it back.
Honestly, I don’t know if he even remembers that he borrowed the money; or if he thought it was a gift rather than a loan. Curse my Stupid memory.
So, I am earmarking that $500 as part of my emergency fund. If I find myself in dire straights, I still feel like I could call him and say “Hey, I just lost my job and my mother — all in one day. Any chance you can pay me back that $500 I loaned you? I really need it for the cremation or she aint gonna fit in the urn.”
That way, I don’t look or feel like a heel, but I still have the comfort of knowing that the money will probably be there when I need it.
Conclusion
There really are no silver bullets here. Lending friends money is rarely a good idea. You typically do not get a good rate, you typically do not get paid back, and if you find yourself wanting to get the money back, you typically feel like a Stupid douche for asking.
Topics: loans |
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