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minoanmiss ([personal profile] minoanmiss) wrote in [community profile] agonyaunt2024-08-15 08:50 am
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Market Watch: ‘I want so badly to help her’

‘I want so badly to help her’: My girlfriend made a $60,000 ‘error of judgment’ at work. Should I take out a HELOC or dip into my 401(k) to bail her out?

Dear Quentin,
My girlfriend and I live together, share expenses, and raise our blended family together. We are not married but own a home jointly. We share all finances, but don’t have joint finances.

I recently learned that she made a major error at work and compounded it by trying to cover for it temporarily with her own funds. She eventually told me, but not immediately. Now she can no longer keep it quiet — and the bill has come due.

She wants to come up with about $60,000 to cover her mistake and bad judgment. If she doesn’t repay the money, she believes she will lose her $100,000 job and possibly be sued for the $60,000.

I have the ability to pay this bill via a HELOC on a property I own alone or with a 401(k) withdrawal. I have a pension so it is only a part of my retirement and, therefore, not essential.

I know these are all less-than-ideal solutions and it’s “not my problem” technically, but I’m wrestling with the thought that all we are as people is our ability to help the ones we love in a time of crisis.

This was a major error in judgment on her part, the biggest in her life. I want so badly to help her get out of this dire situation.

The Boyfriend



No, no and no.

Don’t take out a HELOC. Don’t dip into your 401(k). And don’t give your girlfriend $60,000. The first rule of making mistakes is acknowledging them. That’s how you learn lessons. Your girlfriend’s plan is to somehow reimburse her company without admitting she made a grave error of judgment. You are not helping her. Instead, you are enabling her.
Taking out a HELOC or dipping into your 401(k) is rarely, if ever, recommended to pay bills. If you have to resort to these measures, you simply cannot afford to pay off your girlfriend’s debt. It’s as simple as that. You also face a 10% penalty by making an early withdrawal on your 401(k) and will have to pay income tax on that. So you’ll need to take out more than $60,000.

This is the kind of letter that — in a couple of years — risks turning into something like: “I loaned my girlfriend $60,000 to get her out of a bad situation at work, and she has not made any repayments on the loan, despite her many promises, and now she says the loan was a gift. What can I do?” If only I had a penny for every case of loan vs. gift.

Who is going to pay for that 10% penalty? Your girlfriend? What about the income tax? Will you set up a notarized loan agreement? Is putting yourself under this kind of financial pressure the solution to your girlfriend’s financial problems? I say “problems” because her problem becomes your problem when you have to incur those 401(k) or pay interest on your HELOC.

Something doesn’t add up
There’s also a missing piece to your letter. If she worked as a trader and made a bad trade, why not inform her supervisor? If she is an advertising agent and went way over budget, why not tell her manager? Why shell out $60,000 to make sure she doesn’t lose a $100,000-a-year job? It doesn’t add up. She either did something illegal or she needs the cash for another reason.

I once interviewed a group of people who engaged in white-collar crime. The reasons for their misdeeds ranged from greed to opportunity and financial pressures. One of the convicted felons I spoke to had a family member who had legal bills, and had access to blank checks. In other cases, they willfully set out to avoid taxes and then saw how easy it seemed to do the same to investors. One told me, “We had no empathy whatsoever for our victims.”

Another man, however, was a CEO of an international trade company. He was convicted of mail fraud, wire fraud, securities fraud and conspiracy to commit securities fraud. He said he was unaware that what he was doing was illegal at the time, and he told me, “I’m not dumb enough to commit a crime, and I’m not smart enough to run such an enterprise.” I still don’t know if I believe him.

Not everything is as clear as it seems and your girlfriend’s “error of judgment” is a big red neon sign to you that you should not try to solve this problem by making a second error of judgment. Asking you for $60,000 merely shows she is willing to borrow from Peter to pay Paul. If this was a mistake, she should own up to it. That’s the simplest and most honest way forward.

Don’t help her cover it up.
pauraque: bird flying (Default)

[personal profile] pauraque 2024-08-15 02:42 pm (UTC)(link)
all we are as people is our ability to help the ones we love in a time of crisis

I do not agree with this as a general principle, but if LW chooses to make it their philosophy, they really have to be careful how they define "help".
topaz_eyes: (blue cat's eye)

[personal profile] topaz_eyes 2024-08-15 02:47 pm (UTC)(link)
The question for LW is why and how did this "error of judgement" happen. And also, has it happened before, and did she get away with it. That large a sum, paired with the fact that GF tried to cover it up, could possibly indicate a gambling problem--which means GF's behaviour could escalate if it's not nipped in the bud now. LW absolutely needs to make sure that GF cannot access their accounts.
Edited 2024-08-15 14:48 (UTC)
bikergeek: cartoon bald guy with a half-smile (Default)

[personal profile] bikergeek 2024-08-15 03:14 pm (UTC)(link)
This whole thing sounds like a smaller scale version of how Nick Leeson ran Barings Bank into the ground with bad trades.
castiron: cartoony sketch of owl (Default)

[personal profile] castiron 2024-08-15 03:16 pm (UTC)(link)
Recently I read a comment thread on Ask a Manager where people were talking about mistakes they made at work, some costing the company far more than $60K. The commenters who worked for reasonable companies generally didn't lose their jobs over the mistakes, in part because they owned up to the mistake as soon as they realized it and worked with their company to mitigate it rather than in secret (and no, they weren't required to come up with restitution out of their own pocket, unless the error was "I claimed too much on this expense form".)

I agree that something sounds off about girlfriend's situation.
mrissa: (Default)

[personal profile] mrissa 2024-08-15 03:42 pm (UTC)(link)
"It was an error in judgment" is exactly the sort of thing I would use as a euphemism if what I meant was "she committed a crime but I don't think she's a bad person." And this is part of why I try not to judge people Good People or Bad People most of the time, but rather look at whether it was a good action or a bad action that they did.

I think a lot of us have people we would stand by if they committed a crime, especially if it was a financial crime rather than a violent crime. But I think it's crucial that "stand by" does not mean "cover for." You can love someone and be there for them every step of the way without covering for their misdeeds. And if you start thinking "I don't want other people to know how my significant other actually behaved," that is a giant red flag for the relationship and leads to really, really bad places.
movingfinger: (Default)

[personal profile] movingfinger 2024-08-15 03:47 pm (UTC)(link)
The advice is right on. Do not go into debt to bandage your girlfriend's financial boo-boo. Do not go into debt for your spouse's malfeasance, either, unless a court requires it.

This is a work problem and the girlfriend needs to deal with it in a professional way at work! All we have here is, $60,000 is missing, apparently she is responsible for that missing $60,000, and that's it. She expects to be fired when this comes to light. So it's not looking great for her.

As a bookkeeper, I have bad news for her: if the accounts don't add up, if there are discrepancies, there is already a paper trail documenting the effect of whatever she did. The $60,000 is missing in the real world. Even if she redeposits $60,000 in the employer's account (how?), the events are still there in the books. Coming clean with the employer and taking the consequences is the best way forward.
bikergeek: cartoon bald guy with a half-smile (Default)

[personal profile] bikergeek 2024-08-15 04:37 pm (UTC)(link)
This is also why,in many jobs, your employer will make you take vacation, especially if it’s your job to handle company funds. Makes it much harder for someone to cover up embezzlement or “unauthorized borrowing”.
melannen: Commander Valentine of Alpha Squad Seven, a red-haired female Nick Fury in space, smoking contemplatively (Default)

[personal profile] melannen 2024-08-15 04:59 pm (UTC)(link)
I am trying to come up with a situation where "She made a mistake and is going to get fired if she can't raise 60,000 dollars" would be improved by ponying up 60,000 of your own money, and struggling to come up with any other than "work is doing criminal shit" or "you were doing criminal shit and you're fired either way but if you pay the money back, we won't press charges."

Also the fact that she originally covered it with her own money and that money is also gone is very sketchy.

LW if it actually is a "if I pay them back they won't press charges or blacklist me in the industry" situation, and you love this woman, it might be worth 60,000 to avoid the court case and everything that follows, but in that case she needs to have first openly admitted what's going on, express regret and that she understands why this is happening to her, and you have to accept that this is a gift you are giving her to keep her out of court, not a loan or a way to "fix a mistake". And that you may need to keep fixing similar "mistakes" in the future. You need to write off the job either way; if she's not fired but they are the sort of company that would extort 60,000 in exchange for keeping the job, then they aren't a company you want to work for.
Edited 2024-08-15 17:04 (UTC)
conuly: (Default)

[personal profile] conuly 2024-08-15 07:23 pm (UTC)(link)
If this woman is making $100k, and she has kids (I'm guessing from the phrase "blended family") then where did she get that 60k from in the first place? That's a lot of money to just have sitting around.

And she spent that money, and now she needs the full total again for the same purpose?
purlewe: (Default)

[personal profile] purlewe 2024-08-15 08:19 pm (UTC)(link)
Yeah something smells fishy. She made a mistake, used her own funds, and still needs to cover the mistake? She needs to come clean with her work. She might lose her job but that would be better than doing all this shuffling around of money that has penalties and consequences. And not even HER money that would have the consequences. She needs to tell work and make plans with work to either fix it with them or get fired and look for other work. I think there is more going on than she is letting it be known to her partner
neotoma: Neotoma albigula, the white-throated woodrat! [default icon] (Default)

[personal profile] neotoma 2024-08-15 10:06 pm (UTC)(link)
This smells to high heaven and my real suspicion is embezzlement.

LW should not pony up the money and should strongly urge the girlfriend to admit everything to their bosses immediately. The best outcome is being allowed to keep the job, but the more likely one is being allowed to resign with a promise of a neutral reference in the future and they need to come to terms with that.
tielan: (Default)

[personal profile] tielan 2024-08-16 02:17 am (UTC)(link)
I find it really hard to believe that there is no record of the gf's mistake that will not be found out at some point by said company.

Like, any company worth their honest salt has not only a papertrail (electronic or hardcopy) but also an audit trail - and at some point, someone will audit the accounts and wonder where this money went to and then where the money came from.
torachan: (Default)

[personal profile] torachan 2024-08-16 05:30 am (UTC)(link)
This is sketchy as hell and the LW definitely should not get involved or he could find himself an accessory to whatever she's doing.
matsushima: our inclinations are hidden in books (lazy day)

[personal profile] matsushima 2024-08-16 08:04 am (UTC)(link)
She stole the money, right? We all know an "error in judgement" here is code for "committed a crime." She embezzled the money.

… the real question is: Does LW know that?