Slide Do you need help
getting out of debts?
Find out your options! For free professional and
confidential initial consultation, call:
adam@debtcliniccanada.ca (905) 970-0439
Slide Do you need help
getting out of debts?
Find out your options! For free professional and
confidential initial consultation, call:
(905) 970-0439 adam@debtcliniccanada.ca
Slide Do you need help
getting out of debts?
Find out your options! For free professional and
confidential initial consultation, call:
(905) 970-0439 adam@debtcliniccanada.ca
Slide Do you need help
getting out of debts?
Find out your options! For free professional and
confidential initial consultation, call:
(905) 970-0439 adam@debtcliniccanada.ca

April 2009 – Borrowing from friends or relatives to pay off your debts is good and bad?

By:Adam Aspilla
April 25, 2009

There are many ways to overcome financial crisis depending on the degree of your financial problem. If you have a good credit rating and stable income you may go to a bank and apply for a loan consolidation to improve your cash flow. If you have enough equity on your house, you may consolidate your debts by refinancing your mortgage. If you cannot qualify for loan consolidation and mortgage refinancing, you may consider credit counseling, consumer proposal, debt negotiation, and bankruptcy as a last resort.

Aside from the above options you may consider borrowing from your friends or relatives to pay off your debts. However, it is either good or bad.

It is good if your friend or relative has his/her own funds not being borrowed and you will be able to pay it back according to your agreement.

However, if you are unable to pay it back, your relationship would go sour. Much more if your friend or relative borrowed the money and he/she has to pay the loan plus interest from her/his own pocket. That is why it is not unusual for close friends or relatives would end up in court of law because of unpaid debts.

If you cannot quality for a loan from financial institutions, it is clear sign that you are in financial trouble. Using your friend or relative as an alternative lender to pay off your debts would be a bad idea for there is a greater risk that you would not be able to pay them back, and the consequence would be a broken relationship.

To avoid losing your good relationship with your friends and relatives avoid borrowing money from them to pay off your debts especially when you are already in financial trouble.

After you have been turned down by banks for a loan consolidation, it would be prudent for you to explore the other options above mentioned like: credit counseling, debt negotiation, consumer proposal or bankruptcy as a last resort. You may seek a second opinion to be sure that your approach in solving your financial problem is appropriate to your circumstance.

Adam Aspilla operates the Debt Clinic of Canada Inc. for more than 30 years.  He was a former financial planner, a former mortgage broker, and the author of the book, You Can Negotiate All Your Debts.  He also writes another column, “Biblical Perspectives” in this paper. For a free initial, expert, professional and confidential financial consultation on your financial issues like: Debt Consolidation, Credit Counseling, Consumer Proposal, Bankruptcy, and securing 1st and 2nd Mortgages, call 905-970-0439 or visit www.debtcliniccanada.ca

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