Helper asked to borrow HK$20,000 from us

Posted by jabberwocky (20 days ago)

My helper last night asked me if she could borrow $20000 from us to buy a plot of land in the Philippines from her grandmother. She said we could deduct it $2000 per month from her salary over the next 10 months but could she have the money now in advance. What would you do??
I know her family have had hardship recently as their home was flooded and suffered a lot of damage during the recent floods, and we let her go home for a week to help her husband clear up and salvage what they could. Since she came back she's asked for this huge amount of money. We are quite shocked as it is such a huge amount. Has anyone else dealt with this if so please let me know how you handled it!

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Posted by cara (20 days ago)

my helper has never asked for this kind of money. for us, it would be impossible financially to lend it to her.

i guess you have to decide whether or not she's worth the risk. you would have to look at it as a gift and if she repays it all, great!

you don't say how long she's been employed with you.... or whether or not you think that she is really going to buy land with the money. those two things might have some bearing on your decision.

Posted by IslandHopper (20 days ago)

Answer is simple: no.

And end of discussion about that topic with your helper.

Posted by jabberwocky (20 days ago)

she has only been with us for3 months and so far she has been very private about herself so we don't really know her well enough to judge whether the land is the real reason or not. To be honest we can't guarantee a 10 month payback period that she wants as there is uncertainty with my husbands job here, and a $20000 gift is out of the question!

Posted by axptguy38 (20 days ago)

I would say no.

Basic rules of lending to a helper:
- Never lend more than you would feel ok with losing completely.
- Never lend more than one month's salary.
- Never lend again before the previous loan is repaid.

You can make exceptions if she has worked a long time, if you know her well and so forth. But be very very careful.

Having said all that, better you than a loan shark. Having a little chat with her about the whole thing might be a good idea.

Posted by Sad Sack (20 days ago)

Id tell her to pay her grandmother 2k per month for the next ten months then take title to the land, at most I'd give her a slight advance so she could put down more downpayment if that is required, after all she has a much longer and assumed trusting relationship with her grandmother than with you

Posted by cara (20 days ago)

after 3 months???
there is no way on god's green earth that i would lend it.

Posted by Wiz Bang (20 days ago)

i would definitely and absolutely decline and say NO and not one cent .

20000 is too much money and 10 months or so is an awfully long time. what if she did a runner?

also her attitude towards you and house hold and her work could go south from here on... so be on your toes, be eagle eyed, and keep monitoring her

Posted by smallfry (20 days ago)

Agree with all of the above - in your case I would say no to the request. We have, however, acted differently in our own situation.

Our helper asked us to lend her $50,000 in exchange for staying on in HK for another year instead of taking up a job in Canada. We could not see how she would be able to repay that amount and the deal we came to was that we would give her the $50K in monthly instalments calculated at the rate she would have earned in Canada. Even though she has worked with us for 4 years and the relationship is good, we would not have lent her the sum outright. apart from the other issues other posters have mentioned, it creates an imbalance in the relationship which is difficult to right.

Posted by IslandHopper (20 days ago)

Yes, an employer is not a bank (if you don't happen to work for a bank) . I can't go to my boss and ask whether he could give a HKD 5 million mortgage loan to me....

Posted by axptguy38 (20 days ago)

Agreed IslandHopper. Unfortunately though, helpers have limited credit options, most of them bad. The employer is probably the least "risky" option when it comes to taking a loan. Loan sharks are no fun.

Not saying lend the money. I'm just saying that a helper can't, like a typical employer, go to a bank and get a loan. A lot of them unwisely do end up lending from a loan shark.

Posted by IslandHopper (20 days ago)

axptguy38: the best option would be that they did not borrow from anyone since their ability to pay back is very limited, anyway.

Posted by notyou (20 days ago)

What kind of grandmother would demand all of the cash in one shot? Asiaxpat and Sad Sack had excellent ideas. My rule is also that I don't ever lend more than I can give as a gift. I consider loans to be possibly not paid back. If you give her that much, the incentive for her to quit and hit the road is great!

Posted by axptguy38 (20 days ago)

"axptguy38: the best option would be that they did not borrow from anyone since their ability to pay back is very limited, anyway."

Certainly, and it would be nice if all helpers really understood the limits of their repayment capabilities. Unfortunately they, just like the rest of us, often do not.

Posted by Hyperactivebunny (18 days ago)

my helper had similar situ whr her fam lost their home but she askd fr 15 K which i thought was alot but gvn the situ she was in crying, sad and i didnt want that atmosphere around the house cos you could see she was not concentrating. so we gv her the money cos she has until aug next yr till her contract expires. i also had her state in writing that it was a loan and she will pay back @ 2000 a month. we are in month 5 now. but i would definitely not gv it to someone who has bn w me for 3 mths.

Posted by alexismith (18 days ago)

IS it better to lend her the money and pay it for 10 months(there you can deduct right away the 2K every month in her salary) or borrow money from the LOAN SHARK..

Posted by Wiz Bang (18 days ago)

...and risk the helper doing a runner after just working with you for three months?, and you stuck with the unpaid debt and deal with other loan sharks and debts she might have incurred before you employed her?

hmmm yes definitely which one is the lesser of two evils.

loan sharks can be dealt with however i can't imagine someone running away with my 20 K

Posted by axptguy38 (18 days ago)

"IS it better to lend her the money and pay it for 10 months(there you can deduct right away the 2K every month in her salary) or borrow money from the LOAN SHARK.."

That's the real problem. But just because she will go to a loan shark instead doesn't mean you should lend her the money.

My suggestion is to have a little talk about what is going on. Try to make her understand that borrowing that much money, from you or a loan shark, is probably not a good idea.

Also, in the end, if she goes to a loan shark and this causes issues, you can terminate her without losing all the money yourselves. Do make sure she understands this.