I think OP actually is the one who needs money and is pretending to be the friend who will loan her money.

Don't do it. Friends and money don't mix. Not only that you're not be a real friend, you're being an enabler.

How is a SAHM supposed to pay you back? You'll probably start to resent each other and the friendship will end on a bad note. Is she the only one on the mortgage? I believe all parties would have to agree to the lien. Consult a lawyer before proceeding.

No one else has really said it but what an amazing friend you are op, whatever happens.

Anonymous wrote:We joke that she's going to give everything away so we have to set up a trust where she can't get to the principal.

Well, at least she comes by that trait honestly! Guess we know where she gets it.

I just sent her a link to Consumer Credit Counsel and info about a home equity line of credit. I will follow up with a call to her later today.

Yes, I do have two kids. I was raised to believe you have to be financially independent so I'm trying to do the same for them. My daughter is intrinsically compassionate and generous. We joke that she's going to give everything away so we have to set up a trust where she can't get to the principal.

Do you have kids op?

Thank you for all your responses. I think I did act impulsively and I need a longer conversation with her about other options. I was the first one she told about her problem. She's been slowly building up debt and not telling anyone for years. She's been moving the debt around at 0% interest but I think it's reached a point where she has to start paying the interest.

The consumer credit counseling is a great idea. I did not know there was such a service. I will ask her to look into getting a home equity loan as well. She bought her house many years ago so I know that it has gone up a lot in value. I don't know what the remaining mortgage is but I think they are capable to getting a second mortgage out on it.

I did speak to my DH about it last night and to my surprise he wasn't mad at me. He said if I'm financially capable of helping her then I should with the knowledge that I may never get this money back.

Anonymous wrote:You won't get a primary lien on the house unless she has no mortgage. i assume she has a mortgage with a lender, that bank is first, unless she doesn't pay her taxes then the state or federal government goes first. Or she forgets to pay a contractor and has a mechanics lien on the place. So you are secondary mortgagee at best. And if her parter is also on the mortgage, that partner must sign too, and I thought she doesn't want her SO to find out. UCC 101, her offer for a lien isn't worth much at all.

And like everyone else has said, if she has accumulated this much debt, she probably has no problem failing to pay you back. Don't ever make a personal loan you aren't willing to just give away as a gift. 80k could be a college education, a few nice cars, a down payment on a house, don't do it.

Did you read this op?

I am plus one thousand to her filing bankruptcy. You keep your money, husband and friendship. If you give her the money you are not helping her. You know that right? You were at rock bottom eating off if food stamps and learned how to get out. Your friend will not learn with your loan.

How does someone smart enough to have an extra $80,000. think so stupidly? Sure, give her the money!

The friend should just get an equity line of credit against the house if she has any equity in it. People do that all the time to fund renovations, additions, and sometimes even debt (college tuition, credit card, etc). The fact that OP and the in debt friend haven't even considered this normal line of funding makes me think neither of them is very financially savvy (the fact the OP has money to lend doesn't mean she has the financial know with all). I am very suspect.

^ugh disregard last couple of sentences! Dictating into my phone it never works for me.

OP, please listen to me: your friend has issues with money & so do YOU. And I say this with kindness, because your offer was generous, but you Must. Not. Do. This.

The best way to help your friend would be to assist her in visiting Consumer Credit Counseling or a reputable credit counselor so she can start digging HERSELF out of this mess, and teach her children to be financially independent in adulthood. Giving your friend money is like giving a drunk a drink, OP. She will just start racking up debts again because money is just a symptom of a much larger problem for her. Help your friend address the root-cause of her problems, but keep your wallet CLOSED during the process.

And now for you: you grew up poor, and have brought yourself out of that - so good for you - but you still have the scars of your childhood & an inability to manage money if you were offering your friend $80K on the fly. You can part with $80K, but not part with that money put a down payment on a house for your own family? OP, you are a good person but you need to work through your money issues, too. Please take some time for yourself, maybe through therapy, to overcome your own issues. That is the best investment you can make it this point. OK Judy go back should be OK like us to maybe like play little card game tonight or something when that be fun like you know or something please

OP, sounds like you haven't told your spouse yet. If he objects will you still go through with this loan/gift?

This is one of the worst ideas I've ever heard. First, OP, unless your friend has more than $80,000 in equity in her house, giving you a lien is useless. She might as well be giving you a lien on her yacht or Parisian penthouse. Further, if she co-owns the house, the co-owner has to sign on to the lien for it to be valid, just as if she took out a home equity line of credit. Which destroys any idea of keeping the partner out of this. So since the partner has to know anyway, if friend has the equity, she should take out the HELOC and you should keep your money. The only reason to take your money instead is because there are apparently no consequences for default.

Also, I agree with literally everyone else that you will never see a dime back from her. Truly, if you feel like gving away $80K, there are lots of genuinely needy people in the world. This friend is not one of them.

I'm dying to know - what did your spouse say when you told him/her?