Money can definitely hurt relationships. I have had it happen a few times and I have realized that if I do loan out anything, I shouldn't expect it back. I think your friend was smart to say that and I agree that we should help if we can. Times are rough and it can be hard to speak up though.
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That's true, but it's good that both sides agree on that and they are aware... Despite you don't expect to get your loan back, the other side will still avoid you and feel guilty...