Dear Penny: Are We Stuck Paying My Husband’s Friend’s Student Loan Forever?

Dear Penny,

Approximately two years ago, my spouse agreed to financially help one of his best friends. The best friend convinced my spouse to take over his student loan. The friend promised to reimburse my spouse monthly for the debt. 

The debt is in bank draft form. Each month the payment comes out of our account. Unfortunately, the friend is several months behind with what seems to be no intention to pay. Any advice for a promise gone wrong?

-C.

Dear C.,

Unfortunately, when your husband took over his best friend’s loan, he became legally responsible for that debt. That means he’s on the hook for payments. If your husband fails to make them, he’ll destroy his credit score and could even get sued.

My advice here depends on two factors: First, are your husband and his best friend still on good terms? Second, is his friend struggling to make ends meet? Or do you think his friend can afford to pay you back but is choosing not to?



Have A Money Question?

Senior editor Robin Hartill is a certified
financial planner and the voice of Dear Penny.

Write Dear Penny

Have a tough money question?
Dear Penny wants to help! Write Dear Penny
for Practical money advice.

Dear Penny Circle Form









Your husband could try some guilting if they’re still on good terms. He could say that money is tight because he’s paying his friend’s loan and ask him when he’ll be able to resume payments. Your husband could offer to accept lower payments and stretch the loan over a longer repayment period. If his friend agrees, that means some of that money would continue to come out of your pockets each month. But in this case, getting something is better than nothing.

If he still doesn’t get anywhere — or if they’re already not speaking — it’s time to up the ante. I’m not sure whether this friend promised in writing to pay back the loan or if your husband took him at his word. Ideally, your husband would have made his friend sign a promissory note so you’d have a legally enforceable document.

Regardless, your husband can apply some pressure. He can use a website like RocketLawyer or UpCounsel to find a free template for a demand letter. He should write that if his friend doesn’t resume payments as agreed by a certain date that he’ll be forced to take him to court. He should send it via certified mail.

Sending a demand letter doesn’t necessarily mean that your husband has to sue his best friend, of course. But sometimes people fail to repay friends and family members because they think there are no consequences. Your husband may get his friend’s attention by putting him on notice that he could face repercussions.

Even if your husband doesn’t have a signed promissory note, it may be worth speaking to an attorney about whether suing his friend is an option. If your husband has texts or emails from his friend agreeing to repay him, perhaps he could use those as evidence should he choose to sue. Of course, suing his best friend will end the friendship. But I certainly wouldn’t want to be friends with a person who would abuse such generosity.

The other question here is whether it would be worth it to sue. You don’t say how much money is involved or what your husband’s best friend’s financial situation is. If you know that he’s dead broke, getting a judgment may be meaningless. Remember the old saying about trying to squeeze blood from a turnip?

You and your husband may wind up having to eat the costs of this promise gone wrong. But there are definitely some lessons you can take moving forward.

I’m assuming your husband agreed to put the loan in his name because he could qualify for a lower interest rate. That may have seemed like an easy way to help out a friend, since your husband clearly trusted him to make payments. But in situations like these, you never want your name to be on the loan, whether it’s as the primary borrower or the co-signer. I’d much rather help someone out with high-interest payments by gifting them cash.

The other big lesson is that whenever you help out a friend or family member by signing for a loan, you should do so with the expectation that you’ll be making those payments. That can be difficult for some people to accept. You know you would never break a promise to repay someone you care about, but you can’t assume that the other person shares your values.

Regardless of how you and your husband proceed with this friend, the two of you need to make a pact. Never again will either of you assume legal responsibilities for someone else’s debt. Should you wish to help out a friend in the future, only do so with cash that you can afford to spare.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to  or chat with her in The Penny Hoarder Community.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Debt Advisor Helps People with More Than $15K in Debt Get Back on Track

If you’re in serious debt, you know how hard it can be. There’s the harassing phone calls, the threatening notices and insufficient funds to cover anything more than the necessities. And it feels like you can hardly keep up. You’re nowhere near paying it off, and thanks to high interest rates, the debt isn’t getting any smaller.

You might find comfort in knowing that you’re not alone. But if you have more than $15,000 in debt, you could get your debt under control and regain control of your life with this free debt-relief service.

Let a Professional Renegotiate Your Debt

There’s more than one way to approach your debt. But not every path is right for everyone. But a company called Debt Advisor works with experts who will help you determine what’s best for your financial situation. In some cases, debt settlement might be right for you. Down this path, you’d look for a company willing to take your case and enroll you in their settlement program.

Here’s how it works: Your financial advisors work with your lenders to settle on a lump sum settlement — usually less than the total amount you owed. This could mean lower monthly payments and could save you money in the long run. Debt settlement programs can take several years to complete, but it might be the best option for you.

You might have to pay toward the settlement in a separate escrow account, so your monthly payments might not count towards your troubled accounts.

If a deal is reached and you stick to making your payments, you might once again find your mailbox packed with credit card offers — annoying, but that’s actually a good thing.

Find the Best Solution for You

There is a way back to financial freedom. Just answer a few questions online to connect with one of Debt Advisor’s financial consultants. They’ll help you decide what the best solution is for your situation — and you’ll be that much closer to getting your financial life back on track.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Freedom Debt Relief Will Help You Settle Credit Card Debts

Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners.

Is your credit card debt slipping out of your control? It’s designed to happen that way, you know.

Maybe something unexpected happens, and you get a little behind on your bills and rely on your credit card to get by. Next thing you know, you’re stuck paying north of 20% interest on a revolving  balance you feel like there’s no hope of ever paying off.

Your options can feel less than ideal, too. Declaring bankruptcy? Taking out an expensive loan? No thanks. That’s why we like a debt-relief company called Freedom Debt Relief.

Their program negotiates directly with your creditor to help you find a way to get rid of debt much faster and for less money than making your minimum payments — and you don’t have to declare bankruptcy or take out a loan.

Find the Right Move for You

Here’s how it works: You’ll start with a free consultation with one of Freedom Debt Relief’s experts. They’ll review your finances and help figure out your best path to get rid of debt.

With their debt-relief program, you’ll first need to show why you’re struggling to make your payments. Then you’ll stop using your credit cards and open an FDIC-insured account in your name that you’ll control. That’s where you’ll send monthly deposits that’ll go toward paying off your debts.

Meanwhile, Freedom’s negotiators will talk to each of your creditors to secure a settlement —  either a lump sum or structured settlement that’s less than what you owe. Once you approve the settlement offer from the creditor, you’ll pay the settlement out of your savings account. You don’t owe anything until your debt has been settled. There’s no cost to enroll and no upfront fees to be part of the program. The program could help you get out of debt in as little as 24 to 48 months.

You can cut down a lot of what you owe this way, pay less into your account than you’re paying your creditors each month and get rid of debt.

You might be worried about how this will impact your credit: When you choose to stop making your credit card payments to help Freedom Debt Relief better negotiate with your creditors, you might take a temporary hit to your score. But Freedom Debt Relief’s studies show that people who use their program come out with similar or higher credit — and much less debt.

How This Company Helps Tackle Your Debts

Remember — your debt is uniquely yours, and paying it off involves a specific strategy that works for you.

This process is all about setting you up for success. A debt specialist will review your situation and figure out your best path to get rid of debt. They’ll talk you through your options and spell out a strategy for reducing your overall debt and maximizing your savings.

In an industry that’s beset by scams and ripoffs, Freedom Debt Relief has a very nice A-minus rating from the Better Business Bureau, and since 2002, it’s helped more than 800,000 customers resolve more than $15 billion in debt.

It takes just a few minutes to get started. The initial consultation is free. See how much you could save here.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He knows a lot about crippling credit card debt, based solely on his personal experience.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Accredited Debt Relief Review

Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners.

For people who are drowning in credit card debt and dodging phone calls from creditors, it’s easy to feel trapped. Helpless.

The truth is, many Americans are in the same predicament. But there are ways out, including debt relief.

Take Kerry Smith, for instance. He was a Green Beret who did four combat tours in Iraq and four more in Afghanistan. He fought terrorists and insurgents, dodged grenades and roadside bombs.

After he retired from the Army due to combat wounds, Smith, now 42, tried his hand at real estate. But he got overwhelmed with $84,000 worth of debt from deals that went south.

Looking for help, he found a debt relief company called Accredited Debt Relief. He was wary of scams and ripoffs, but he decided to give it a try because of its A-plus rating from the Better Business Bureau.

In this Accredited Debt Relief review, you’ll find out how this company works and why this retired vet has been floored by how much of a difference it’s making.

So, What Is Accredited Debt Relief?

Accredited Debt Relief creates custom debt consolidation plans for people who have serious debt and have trouble making payments. The company works with each client to create a personalized repayment plan.

While Accredited Debt Relief can help consolidate your debt into a single monthly payment, their debt relief services don’t require a good credit score or personal loans.

If you have at least $10,000 in unsecured debt, meaning there’s nothing your lenders can repossess, such as a car, this debt relief company can help. You can get help paying off payday loans, credit card debt, medical bills, personal loans and other unsecured loans  — student loans are excluded.

The only other requirement for Accredited Debt Relief’s debt consolidation program is a stable source of income. You’ll need to consistently make your monthly payments in order to qualify for their debt relief options.

If you meet the basic requirements, you could notice your credit score start to rise after you start making consistent payments through Accredited Debt Relief.

How Does It Work?

Everyone’s debt is unique, and paying it off involves a lot of strategy.

An Accredited Debt Relief debt specialist reviews each person’s individual situation — the initial consultation is free — and figures out the best path out of debt, whether that’s a debt settlement or one of their debt-relief programs.

They’ll explain all the options and spell out a strategy for lowering your payments and maximizing savings.

This debt-relief program is all about setting people up for future success. That’s why it’ll have you open a savings account in your name that you’ll control. That’s where you’ll send monthly deposits that’ll go toward paying off your debts.

You’ll also need to stop using credit cards or drawing on that line of credit. This will help the debt relief program negotiators build your case.

Then, the negotiators will work with the creditors to secure a settlement, a lump sum that’s less than the owed amount. That’s how they save people money. Once you approve the deal, you’ll pay the settlement out of your savings account.

Pros and Cons of Accredited Debt Relief’s Service

There’s a lot to like about Accredited Debt Relief’s service, but why should you go with them instead of one of the other debt relief companies? Check out the pros and cons of this service, compared to other debt relief companies, to see why you should pick their pathway out of serious debt:

Pros:

  • They work with a wide variety of unsecured debt: medical bills, payday loans, debts owed to credit card companies and much more.
  • Accredited Debt Relief’s clients get out of debt in 46 months on average.
  • They offer free consultations on debt relief.
  • They have an A+ rating from the Better Business Bureau and are accredited by the American Fair Credit Council.
  • Debt settlement with Accredited Debt Relief may be as low as 50% of what you originally owed.

Cons:

  • Secured debts and student loans aren’t eligible for Accredited Debt Relief’s program.
  • You’ll need to owe at least $10,000 in order to qualify for debt relief.
  • It’s not available in every state.
  • Not everyone qualifies for a debt settlement.

Frequently Asked Questions

Is this a debt-settlement program?

Yes, Accredited Debt Relief’s certified debt specialists will work with your creditors to negotiate a lower amount on the debt you owe.

What if a creditor won’t work with Accredited Debt Relief?

Your monthly payments won’t go to any creditor that declines to work with you on debt settlement. Many other debt-relief companies ask for payment before an agreement is reached.

How much will a debt-relief program cost me?

Fees range from 15% to 25% of the debt you owe. Accredited Debt Relief won’t charge you until after you’ve been enrolled in the debt settlement program and your creditors have come to terms.

How This Green Beret is Saving $700 a Month on His Debts

When Smith retired from the U.S. Army after 21 years, he was ready to try something different, so the married father of three got into real estate investing.

He bought and started remodeling a duplex in Olympia, Washington. To save money, he tried doing it himself with a home renovation loan, but he still ended up owing tens of thousands of dollars to his Home Depot and Lowe’s credit cards.

Then his dad got sick, and the family moved to North Carolina to take care of him full-time.

“I started missing payments, and then it was a massive snowball,” he says. “It was just a maelstrom of different things in my life.”

In retrospect, he would have done things differently. But hindsight is 20/20.

“That’s how I got into this spot,” he says. “It wasn’t that we were out buying Gucci or designer threads or anything like that. I was just trying to do right by my family.”

By the time he reached out to Accredited Debt Relief in late 2019, he was $81,000 in the hole.

Accredited Debt Relief is working with him on a debt-settlement plan and has been negotiating his credit card balances down by 50%.

“They’ve been able to negotiate these accounts that were $15,000 or $20,000 down in half, and that’s just something that I can’t do on my own,” Smith says.

The company charges for its services. For debt settlement, it typically charges 18% to 25% of the total debt, which is standard in the industry.

Still, it’s worth it for Smith and his family and is a huge relief. He’s making his monthly debt payments to Accredited Debt Relief instead of his creditors, which leaves him more money to take care of his family.

“I give them $960 a month, which is $700 less than I was paying before,” he says. “We haven’t been getting any more phone calls from creditors — which is nice.”

Getting Started With a Free Consultation

Accredited Debt Relief generally works with people who owe more than $10,000. The idea is to help people out of debt without declaring bankruptcy.

How long this process takes varies, but the average person enrolled in the program is debt-free within two to four years.

Accredited Debt Relief’s reviews are overwhelmingly positive, and the numbers don’t lie — this company has a track record of getting people out of serious debt in just a few years.

If you or someone you know is in serious debt, Accredited Debt Relief deserves serious consideration. If you qualify, it can help turn finances around and help you reclaim your life from debt.

Like what you learned in this Accredited Debt Relief review? It takes less than a minute to sign up for a free initial consultation.

Accredited Debt Relief doesn’t directly service the following states: CT, DE, GA, HI, IL, KS, ME, ND, NH, NJ, OR, OH, RI, SC, VT, WA, WV and WY.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Dear Penny: My Dad Says I Owe Him $400/Month When He Retires. Is This Fair?

Dear Penny,

Within the last year as I've learned more about finances, I’ve realized that I grew up in a financially illiterate family, and so did my husband. Both of us grew up with poor but frugal parents, and our frugality has helped us manage so far. 

We have a credit card, but we pay it off every month. We've paid off our two used cars, and we pinched pennies to pay off our school loans before our two kids were born. We bought our first house in June 2020 and have a monthly payment of about $1,600, so the only debt we have is that mortgage. I am a stay-at-home parent and my husband's salary is $70,000 before taxes, insurance, etc., is taken out. We currently have about $13,600 between our checking and savings accounts, and my husband has a 401(k) through his employer with a 50% match, which we use.

But here's the rub: When I was in college, some of my financial aid fell through. I had to face the fact that I couldn't afford to go back after that summer. I was distraught because I was young and dumb and could only think about missing my friends and boyfriend (now husband). 

I don't remember how it got smoothed over, but it did. I was allowed to go back. Again, I was young and dumb and didn't give it another thought.

Much later, I learned my father took loans in his name to pay for what my financial aid didn't cover. He paid off those loans with his and my mom's retirement savings. I didn't realize this until it was already done. 

Now they are talking about retiring in the next few years. (The date keeps shifting, but currently they're talking about 2025 at the ages of 69 and 68.) They are missionaries living overseas and plan to move to the U.S. to the same state my brother and I live in.

Because they currently have about $6,000 total to their name (no debt, but no other savings), my brother — who is financially better off than I — bought a condo this year and is renting it out until my parents retire. My understanding is that he and his wife had to juggle things to make this work. But they decided this real estate investment would help fund their own retirement someday, not just provide a place for our parents to live.

My father now wants me to help pay for his and my mom's retirement since he helped pay for my college. The loans totaled $39,769, but he had to pay interest. At first he wanted us to pay back $45,000 split into monthly payments of $400 from the month they retire until the $45,000 is paid back after about 10 years or they both pass away, whichever comes first. 

Now he's saying because of inflation, he wants us to cover “about three days a month of our retirement living costs — whatever inflated dollar figure that happens to be — for the first 15 years of our retirement, or until death. Whichever comes first.” That’s a quote from his email to me. He got that figure by taking their current monthly income, averaging 21 work days a month, and dividing it by the $400 a month, which is 3.3 days of their current income.

We’ve plateaued at our current savings level since buying our house last year. I realize we have a few years to prepare for paying $400 or whatever it will be a month, but I'm at a loss for what to do or where to start. I'm also worried that we aren't saving enough for our own retirement. What if we end up with no options like my parents and hurt our own children's finances in the future? 

I've been trying to learn about bonds, Roth IRAs, and so on. I'm so overwhelmed by how little I understand. 

This isn't legal debt, but I still owe my parents. They won't be able to live in retirement without my paying them back. My brother has already done so much by preparing housing and a used car for them. I can't ask him for more. Plus, it's my fault my parents don't have retirement savings, not my brother's.

Can you please help me decide what our next steps should be? Do we hire a financial planner to give us custom guidance? Do I need to read books and take classes to understand how to manage all of this since Google results are going over my head? 

I’m considering taking a part-time job so its entire income can go toward paying back my parents, but I don't know if that's the right move either. I can't work full time right now because our kids are elementary-age, and paying for childcare would eat up nearly the whole salary.

And don't get me started on my in-laws, who live in a different state. My father-in-law is incarcerated. My mother-in-law is living on only Social Security in my sister-in-law’s apartment. My sister-in-law is single with two elementary-aged kids and is working full time while trying to earn a teaching degree. We are wealthy compared to that side of the family. We want to help them too, but we feel stuck!

-Overwhelmed

Dear Overwhelmed,

It’s not your fault that your parents can’t afford to retire. Responsibility for that rests on your parents’ shoulders.

The money your dad paid for these loans would certainly be helpful to your parents. But it’s unlikely that $45,000 would have been enough to buy a comfortable retirement, even if your parents had left it invested.



Have A Money Question?

Senior editor Robin Hartill is a certified
financial planner and the voice of Dear Penny.

Write Dear Penny

Have a tough money question?
Dear Penny wants to help! Write Dear Penny
for Practical money advice.

Dear Penny Circle Form









If your dad intended for you to pay back the loans for your college, he should have discussed that with you at the time. But I’m not sure that this was actually his intention back then. It sounds like your parents are panicked as their retirement is approaching. Now they’re going back and trying to stick you with part of the tab, plus a nonsense inflation adjustment.

Your problem isn’t financial illiteracy. You and your husband are doing a fine job of managing your money. The problem is that a $70,000 paycheck only goes so far. Your husband makes enough to cover your family of four. But that’s not enough to pay for your parents’ retirement or your in-laws’ needs.

I don’t think you should agree to help out your parents just yet. That doesn’t mean you’re vowing to never help them out. But you need to focus on your own savings first. Since you have two young children and you’re dependent solely on your husband’s income, building up a six-month emergency fund on top of retirement savings should be the primary goal.

You can be honest here: Tell your parents that you’re not currently in a position to pay $400 a month, and you don’t know if you will be in 2025. Say that you’re grateful for their sacrifices. But make it clear that you didn’t know they were raiding retirement accounts to pay for your education.

What you should avoid is giving your parents a full accounting of your finances. Expect every piece of info you provide about your income and obligations to be used to make the case that they need your money more than you do. Don’t give them that leverage. “I’m not in a position to give you $400 a month and I’m not sure if I will be four years from now” is sufficient.

Knowing that their daughter isn’t a guaranteed source of retirement income can help guide their financial decisions over the next few years. Regardless of whether you choose to help out later on, don’t base this decision on the level of support your brother is providing. This is about what you and your family are willing and able to give.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com or chat with her in The Penny Hoarder Community.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

%d bloggers like this:
Skip to toolbar