“What’s a little money between friends?” That common question has wrecked more than a few friendships. Reader Alexa (who blogs at Single Moms Income) is in that situation now. She recently sent us a story and a question. Here’s her tale.

I moved back home near the end of July where I immediately reconnected with one of my old friends — we’ll call him J — whom I hadn’t seen in several years. In just a short couple of months, he became one of my best friends again. We began talking nearly every day and visiting each other a couple of times a week.

My new-found best friend has a baby on the way and was driving a clunker on the verge of breakdown. His credit is bad (warning sign number 1), so he wanted to purchase a reliable car from a “buy here/pay here” car lot. The car lot required a significant down payment, and he was $500 short. J called and asked me if he could borrow that $500.

I initially told him no because I didn’t think it was a good idea. He called and asked again, so I thought he and I could do a little bartering. J is in the construction business and is a very good handyman. I recently purchased a trailer that was in need of some extensive work. I gave J two options: he could work on the trailer to pay me back or he could pay me $75 a week until the loan was repaid (interest free). He chose option number one.

I’m no sucker so I made him secure the loan with something more valuable than the amount that I had given him. He gave me his grandfather’s old Thompson Contender Pistol, four gun barrels, and two scopes, all retailing for around $1,200. This was a good deal to me; my family owns gun shops and I could easily sell the merchandise to them for $800 if J was to break the contract.

We drew up a contract and signed it. J was going to do the work to pay me back and upon completion I would give him his gun and accessories back. The first week he came and worked about four hours, a whopping $60 worth of work. That was it. I called him – no answer. Sent texts – still heard nothing.

I blindly trusted this friend. Now I have $800 worth of his grandfather’s (who passed) guns and accessories and have a guilty conscience about selling them.

tearing up a contract

As we know from the response to Jezna’s Reader Story from last Sunday, a lot of us wrestle with lending money to family or friends who are not as fiscally responsible as we try to be. At least Alexa had the sense to secure the loan with something of value. But now she feels guilty about selling the guns and stuff. Obviously, J didn’t care much about his grandfather’s things.

Because they have a written contract, it is technically enforceable. (It would have been better if they’d had a third, neutral party witness it and then had it notarized.) Alexa could sue him. That gets ugly and expensive, but it is an option.

Me, I’d give J another month to show up and do the work. I’d keep calling or texting. If there was no response, I’d sell his stuff.

So, what do you think Alexa should do? Have you lent money to friends or family who haven’t paid you back? What did you do?