How to handle a parent going through divorce asking to borrow money

Question

Asking for a friend. The parents are currently going through a divorce and one parent is struggling a bit financially to pay for lawyer fees for example and needs to borrow money.

The problem is that the one parent has asked for money previously, around $1000 which has not been paid back yet.

Now, at a later date the same parent came back and asked for a larger loan, closer to $5000.

This puts the child in a very weird situation and how should it be handled? Even if the child has enough money to spare is this a good idea? How do you decide if you should lend money to your parents? When do you put a stop to it?

Other than a signed contract between the parent and child is there something the child should consider?

I don't believe a country is relevant but it would be in the EU.

Answer 1

Lending money between relations is typically a bad idea. This can lead to very awkward dinner conversations and has been known to terminate these precious relationships. In these cases the wisdom is to give or not; but do not lend.

If your friend can afford and is willing to give the money to this parent, then he should do so. However, this situation adds another wrinkle. This friend could then alienate the other parent!

If I found myself in this situation I would forgive the 1k already loaned, but not do anything further. Saying "no" to a further loan will be somewhat tempered by the other loan's forgiveness.

The fact that you are suggesting a contract be drawn up indicates that this money might never be paid back, and your friend will have a problem with that.

One other fact to consider: Often times divorces are settled when one or both sides get tired of paying lawyers or run just out of money. The sooner this happens, the better off everyone is (including the children). By loaning money your friend could be paying for a "hurt feeling" motion. Something I am sure he has no interest in doing.