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Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
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It is natural to turn to friends and family when you're in a financial bind. Don't let your ego keep you from asking for financial help. Tough times can happen to anyone. Giving financial help is a way friends and family can do something to help.

If you want to keep a relationship:

  • Do your financial homework so you can explain your situation and understand if and when you can pay money back.
  • Be honest about your financial situation and about what you're asking for. You may need money again in the future. If there is little likelihood that you will be able to repay the money, let them know.

There are four basic ways to ask friends and family to help financially:

  1. Use a crowdfunding website.
  2. If you have the energy, do fund raisers.
  3. Ask for a loan. A loan could either be directly from the person or could be a bank loan based on your friend's credit.
  4. Ask for a gift.

If you ask for a loan, even if your friend doesn't consider this as a business transaction, you should. If you keep the request on a business-like basis it will make a possibly uncomfortable situation more comfortable for both of you. If you eventually stumble and can't make a payment on time, let your friend know immediately.

Asking for money, in whatever form, creates a new dynamic in the relationship. Keep the lines of communication open. Don't stop talking with the person.

A thank you note is always welcome,no matter how small the amount. (A handwritten note is often more welcome than an email note.) A loan, for instance, may seem like a business relationship to you especially when there's paperwork involved. However, to your friend, it's not why he or she is entering the transaction.

It is preferable to not ask someone to borrow money on your behalf on their credit card. Interest can pile up quickly on a credit card. Possibly even worse, you may end up hurting the credit rating of someone you care about and who cares about you.

Asking friends or family for money can be pretty depressing or uncomfortable. If it is, and the discomfort stops you from moving forward, speak with your support system, including a support group and professional help. Finances can be even tougher to discuss than your illness. 

If your story could be newsworthy, see: Media: How To Tell Your Story.

For more information, see:

Fund Raisers

Create a list of ideas for fund raisers. For example, setting up your own web site to which people can donate. You'll need a method of collecting money, such as Paypal ( offsite link)  To learn more, see Fund Raising.

If you have the energy, consider ideas such as a twist on the old "rent party" or a fund-raising raffle. To learn more, see How To Give A Fund Raising Party.

If part of your fund raiser is to ask people you don't know for money, do what you can to add legitimacy for your request. For instance, if you're raising money for a treatment, ask the facility in which the treatment will be given to set up a fund in your name to which people can donate.

NOTE: In 2017, people can give you a gift of up to $14,000 a year ($28,000 if they are a for married couple) without having to file a gift-tax return with the IRS or eating into their lifetime gift-tax exclusion. (The amount varies from year to year. For gift tax in a given year, see: offsite link

If You Are Going To Ask For A Gift

Keep in mind that everyone is allowed in 2017 to give a gift of $14,000 per year ($28,000 per couple) to each person per year without any gift tax considerations. This is known as the "Annual Gift Tax Exclusion."

There is no limit if a person pays your medical expenses directly to the health care provider.

Gifts from one spouse to another are not subject to these annual gift tax exclusion rules. The gift taxes exempt any and all gifts from one spouse to another.

When you receive a gift, you do not have to pay any taxes on the gift.

Before You Ask For Money From A Friend, Think Through The Finances And Your Continuing Relationship

Step 1. If you haven't already, review our information on How To Deal With A Financial Crunch to see if there are alternatives that would decrease the amount you need, or eliminate it all together.

Step 2. Determine how much you need. Of course expenses relating to a health condition can vary greatly, and unexpected expenses can occur. As an aide, look at our information on Financial Planning and complete the interactive charts. Be honest with yourself and don't ask for too much OR too little. You may not get all you ask for in any event.

Whether you receive money as a loan or a gift, it's tax free to you so you get to keep all of what you borrow.

Step 3. If you're considering asking for a loan:

  • Consider what kind of loan to ask for. For example, are you going to ask that the person to:
    • Loan you the money directly?
    • Co-sign a personal loan with you (in which case you would be the primary person to repay the loan. Your friend would have to pay if you don't.) Think about what rate of interest you should suggest paying. A friend may say that no interest is necessary. However, to have the transaction considered to be a loan, interest is required at least equal to the minimum specified by the IRS (see offsite link to find the minimum rate.)
    • Take out a loan on your behalf, possibly a home equity loan?
  • Think about an exit plan. In other words, how and with what are you going to pay the money back (including interest), and over what period of time?
    • Be prepared to show the person you're approaching for the loan your calculations indicating how and when you can afford to pay back the loan. If you volunteer to show the person this information, you'll be sending the messages that you've done your home work, you're serious, and you intend to repay the money.
    • If the result iof your calculations is that you are not likely to be able to repay the money, consider asking for a gift instead of a loan. It will help keep the relationship in tact.

Step 4. Before you ask for money:

  • Think about what you will say, including your response to likely questions. It is not advisable to come of as being entitled to the money.
  • Consider the setting in which to ask.
  • If you are married or have a partner, consider bringing the person with you when you request the loan. According to Money Magazine, it's more difficult to say "no" to two people.
  • Decide what you will do if the person says no, or "yes," but to less than you requested, or insists on real business terms. Will you not let it affect the relationship? Will you stop speaking with the person? After your ask for money:

Step 5. Keep the relationship in mind.

  • Let the people who help you know you're grateful. A hand-written thank you note or a small token is always appreciated. A token gift can be something as simple as making the person's favorite cake or dropping off something inexpensive that suits the person (such as a plant for a gardener).
  • Don't stop speaking to someone who loans or gives you money. Keep the lines of communication open even if it feels "simpler" to simply lose touch. It'll be good to have old friends around when you get past this financial crunch. (Machiavelli would also likely add that you may need help in the future and burning bridges is never a good idea.)

To Learn More

If You Ask For A Friendly Loan

There will be less chance for misunderstanding if you do the loan in a business-like manner.  This is the case even if your friend doesn't consider a loan to you a business transaction

If the loan is $10,000 or more, interest should be charged. The Applicable Federal Rate (AFR) sets the minimum on personal loans. The rate varies monthly. Interest on your loan should at least be the minimum prescribed for the month the loan is created. You can find the AFR at: offsite link. If there is no interest, or interest is less than the AFR, the amount loaned may be deemed to be a gift which could have unexpected tax consequences to the lender.

If the loan is under $10,000 there doesn't have to be interest. The loan still won't count as a gift.

It bears repeating that borrowing money requires an "exit plan" -- how and with what you're going to pay back. Otherwise, it should be a gift rather than a borrowing. And, since you may have to borrow again in the future, planning this properly may smooth the way for future loans.

Pretend that your friends and family members are a bank and treat them similarly. Be honest about your financial situation. If you can't see your way through to payment at the present time, but you might be able to repay sometime in the future, say that.

If your friend agrees to give you a loan, it could either be through a bank, through an unregulated service such as Virgin Money ( offsite link) or directly as a personal loan. (To learn more about use of a bank, see the next section). Banks and other services charge a fee. 

Once you have the money, live up to your agreement. If you can't make an agreed payment, let your friend know immediately.

If A Friend Loans You Money Through A Bank Loan

A borrowing may consist of your friend bringing you to a bank or lending institution and helping you make a transaction there through a guaranty or co-signature.

  • Guarantee: The bank loans you the money, with a set rate of interest and a repayment schedule. The loan is based on your friend's credit. Your friend guarantees that if you do not make a timely payment, your friend will -- including paying off the entire debt. Interest is likely to be higher than a loan as a co-signature.
  • Co-signature: The bank loans money to both you and your friend. Your friend agrees to let you keep all the cash. In return, it is your obligation to make the payments when due. If you don't, your friend has to make the payments. Interest is likely to be less than would be the case with a guarantee.

On the upside, a loan can help repair your credit rating. (See Credit.) On the other hand, even one late payment can hurt your friend's credit rating if the bank reports the late payment. (This is more likely to happen if the person co-signs a loan for you, instead of guaranteeing it.)

If A Friend Loans You Money Directly As A Personal Loan

A friend may choose to loan you the money directly. In this case:

  • Put the terms on paper -- even if the paper is as simple as an I.O.U.
  • Include a rate of interest and when interest is payable. For instance, interest at the rate of six percent per year, payable monthly, quarterly, semi-annually or annually.
  • Include when you are supposed to pay back the loan. For instance:
    • The loan could be a "demand" loan -- one that is payable when the lender demands it. (Since the lender is a friend or relative, that may be a long time from now.)
    • The loan could be payable at a certain date. (If the two of you agree, you can always change the date.)
    • The loan could be payable in installments. If the loan is payable in installments, include whether each installment is interest only, or part interest and part repayment of principal (the amount you borrow.)
  • Include whether there is a penalty if you pay early. If so, describe the penalty. (There should be no need for a penalty since your friend or relative will likely want the money back as soon as practical.)

You can find do-it-yourself forms in your local stationary store, online through such sites as offsite link or offsite link -- or you can seek the help of an attorney. The form to use is generally known as a Promissory Note, or Unsecured Promissory Note.

  • There are two types: an agreement to pay by a specified time, with or without installments, and a "demand note." Use the type that fits your agreement.
  • Make sure the form was created for use in your state so it is meets the state's requirements for legality.

After You Receive Money From A Friendly Loan

  • Keep your side of the bargain. Pay back the loan as agreed. Pay it off in small affordable chunks if you have to.
  • As your economic picture starts to improve, let the person know it. If it improves enough so that there is extra money, pay an extra amount when you make an installment payment, or a substantial chunk if the improvement is great enough.
  • If you need to do something your friend could consider an extravagance (like take a vacation), put yourself in your friend's shoes. How would you feel if you loaned a friend money for medical care, who used an unexpected chunk of money to go to Paris instead of paying you back? Perhaps you need the trip for your mental or physical health. Let your lender know you're open to talking about anything about the loan or your relationship that may bother the person.

If You Can't Make A Loan Payment On Time:

  • If a bank loan is involved: Let your friend know as soon as you realize you won't be able to make the payment. She or he will want to make the payment on a timely basis to preserve her or his credit rating. (Explain why you're not able to make the payment -- even if it's the same reason that may have happened previously. It's better for the person to know the circumstances than to think you are undisciplined with his or her money.)
  • If you borrowed directly from a friend: Let the friend know when you know before the due date comes and goes. Your friend can waive a default (when you can't keep a promise), or the two of you can come to a mutually agreeable different date by which you can do what was agreed.

Your health condition gives you a lot of leeway. But no one wants to feel taken for granted, or as if their friendship has been abused.