If you’ve never been through a divorce, it can be surprising to find out a friend hasn’t officially ended their marriage. You may think, what’s the holdup? The quick answer: divorces aren’t cheap. According to a CBS report, the national average cost for a divorce is $15,000 to $20,000 per party. That doesn’t even include what a divorce may cost in time away from your job, relocating or counseling sessions.

So, what happens if a friend asks you for a loan for their divorce? Do you automatically give it to them? Do you say no and risk damaging your friendship? Will you damage the friendship if you say yes?  Here are some factors to consider if you want to loan money to a friend for their divorce.

Should You Loan Money to a Friend for Their Divorce?

There is no easy answer to this question. It’s something you need to look at from all angles; not just financially, but emotionally as well. Before you consider loaning money to a friend, first ask yourself if you can afford it. If the money is never repaid, will this create a hardship for you? If you are financially able to loan the money, consider these points:

• Will it harm your friendship? What are your expectations? If your friend can’t pay you back quickly, will that be a problem for you? What if they never pay you back because their situation goes from bad to worse? What if they seem to have money for vacations, going out, or a new car – but still don’t pay you back?  Look at all the potential outcomes so you can make a decision that works for you. Money is already a fairly taboo subject. It is often a factor that leads to divorce. Will it harm your friendship, too?
• Is this a pattern? Maybe this is your friend’s third divorce. Has borrowing money become a habit with them? You don’t want to judge, but giving them a loan may lead to the next marriage and divorce. It could be easy to feel resentful.
• Will they let you pay the filing fees or attorney directly? If you want to make sure the money is for the divorce, you can request to pay the fees directly. This is a great way to make sure you know what you’re spending and where the money is going. Keep in mind that this doesn’t mean the attorney has any duty to you; their duty is to their client, not their client’s “benefactor.”
• Will it have a positive impact? Healthy friendships are wonderful. If your friendship has been long-term and balanced, loaning them the money they need may have a beneficial and positive impact. Both you and your friend can feel good when you take the step to loan money to a friend for their divorce.

It’s a Personal Decision

Just because you can doesn’t mean you should.  Giving your friend a loan is a deeply personal choice and one that should be carefully considered. Your decision comes with expectations for both you and your friend – be sure that you are both on the same page.

If you decide to loan your friend money, be sure to put your agreement in writing – including the amount borrowed, the interest rate (if any), and the expected repayment terms. While this step may seem very formal, it is vital to set the expectations for both you and to create a record of the debt for the Court.

You may also want to talk with your friend about how to reduce the overall cost of their divorce.

For example, a collaborative divorce keeps divorcing couples out of court. It offers a way to save time, money and emotional energy. Of course, both spouses must be willing to compromise and follow the collaborative process for it to succeed.

Contact the Professionals

Most of what couples deal with during a divorce relates to finances. One of the professionals that may be brought in to a collaborative divorce is a financial neutral. They can help explain tax consequences and budget strategies the couples may not have considered and they can work with the collaborative team to help the couple brainstorm settlement ideas to meet their mutual goals as they move on to the next phase of their lives.

If you or someone you know is ready to learn more about starting the divorce process, contact a Best Legal Choices professional today.