Dear Judy,
I read your reply last month to a reader whose good friend died — she wanted to know if she could call the widower and reclaim a pair of diamond earrings she had given her friend. I’m in a similar, but not exactly the same, position.
My good friend died of stomach cancer last month, and it was a terrible death. I realize there are probably no fabulous deaths, but this one was really horrible, and I saw her suffer for over a year. She didn’t deserve that kind of end: tubes running in and out of her, doing no good. She was a great person. This will help to explain my own actions, or rather inactions.
Two years ago, when my friend seemed healthy, I lent her $4,800 toward the price of a used car. She’d gone through a hellish divorce (her husband got the family car — don’t ask) and promised to pay it all back to me over time. And I said, No worries — when a year is up,. you can start paying me back in installments. As I say, we’d been good friends a long time (since high school in fact) , she had a nice job, and besides, we both thought she was in perfect health.
Then my friend got very sick and had to quit her job. So — no money. Of course I wasn’t going to ask her for it then, under the circumstances, either.
Then she died last month. She left everything in trust to her two kids. Her parents, who are kind of old, got the used car. I don’t know what to do. Do I tell the old parents (they’re in their seventies) that I lent her the money. There’s no proof, no IOU note or anything.
Or do I just forget about the loss of almost $5,000? Compared to what my friend went through, I guess it’s nothing. I’m still alive, after all, and pretty young — 46. I guess I can make more money. On the other hand, that is a big sum to lose. At least for me. And especially in this terrible economy. I’ll go along with whatever you say.
Colette (Don’t print the name of our town, please)
Dear Colette,
I understand how difficult the situation is for you: either way, you can’t win, can you? You lost a good friend. And now you stand to lose a lot of money.
The way I see it, you don’t have a lot of options. If you inform the aging parents — who are already devastated by the death of their daughter — that the car they inherited was purchased, at least in part, with your money, you seem insensitive and just perhaps a liar to boot.
Why? Because you have no way of knowing if your friend ever told her parents about the loan. And I’m betting, from the tone of your email, that there’s no documentation to support your recollection of events.
So I would say, judging from what you’ve written, that yes — you’re probably going to have to accept the loss of a huge chunk of change. It is, as you mention, nothing compared to the loss of a life.
But I also think there’s a lesson here, and that it’s important for you to change your future behavior. Even for loans extended by the closest of friends, it’s always a good idea to have a written record. It doesn’t have to be a formal document — just a note promising repayment at some specified date.
I know that sounds cold and untrusting.
But as you’ve discovered through experience, there’s nothing colder than cash you once had — which is now warming someone else’s pocket.
Thank you for writing
Judy
If the parents, really knew about the debt, they would feel terrible. Obviously, Colette cannot approach them directly. But she may share her dilemma with someone close to them, like a family member or clergyman, who could take it from there.
I had a similar proble - I lent more than $16,000 to a friend who needed (wanted?) to buy a condo. I didn’t have IOU note from her, no records, nothing, just her word of honor. Supposedly. She skipped town, leaving her belongings, and her tiny amount of equity in the condo. I got nothing becuase I had nothing to show I made the loan “in good faith”. So never lend sizable amounts to friends without having it on paper, unless you want it to be a charitable gift–without the tax benefits.
Ron
I was a lot luckier than some of your readers, Judy. I lent a friend money on good faith — or I would have anyway because I trusted him completely. I told him I needed no IOUs, nothing, because we’d been friends since 2nd grade. Also, he was in his thirties, like me, and in good health. Or so we all thought. But my friend insisted on providing me a handwritten note acknowledging the debt — which came to about $3,000. It was helpful when he dropped dead about 6 months after I gave him the money. I debated a long time though, before showing it to his wife (she wasn’t happy. But she honored the debt)
The parents know you were good friends. My guess? If you tell them about the money, they’ll trust what you say. But be kind. Insist, when you talk to them about it, that there’s no rush. Give them at least a year to pay you.
Very interesting article, i have bookmarked your blog for future referrence
Best regards
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