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Thread: When a family member owes you money

  1. #1
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    Angry When a family member owes you money

    Hi,
    About a year ago my DH loaned his brother and our SIL $2000. They needed the money to move out of state. They were kicked out of thier previous rental home for reasons unknown but I am sure it was financial. MY BIL called and begged for the money and needed the money ASAP. My DH felt obligated to help his only sibling however like me we knew that my BIL & SIL are not responsible when it comes to anything especially money. MY BIL was desperate and so my DH decided to take a chance and "loan' them the money with the understanding that they would pay it back in monthly installments. We had to take the money to loan them out out our bank and explained to him that after 6 months there would be interest involved. He agreed and advised us that he had a good job waiting for him in his new city as well as one for his wife/SIL. Well of course they moved and we never heard from them. We did locate them eventyally and they ignored our emails, calls regarding the payback money. We eventually got a check for $50 which bounced! After another 5 mths of asking for payment we got a money order for $25 only with a note saying that they would be paying us $150 monthly...which was fine with us. Then again nothing from them. My husband send another email/letter with the breakdown of what they owe etc... We just got another money order for $15 only and no note. I understand that money may be tight but their lack of communication is what bothers us the most. What would you do? I know we should probably just write it off but I can't take their facebook updates of what they are up to with going out, buying iphones, trying to concieve etc. We are their family and I am sick of being treated like the enemy from them. advice?
    Context and memory play powerful roles in all the truly great meals in one's life.
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  2. #2
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    <sigh> I sure understand where you're coming from... Evidently, it wasn't your idea to "loan" them the money, so the solution can't be yours. I personally would write both them and the debt off -- I don't think you'll ever get the money, and I, for one, would "unfriend" them on Facebook, so I didn't have to see the results of their deceit. Some people are just not worth the effort, whether they're family or not!

    So sorry this happened to you and your DH.
    Kay
    I'm a WYSIWYG person -- no subterfuge here!

  3. #3
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    Well - I'll tell you what their mentality is. They think they are entitled to your money, that you should just give it to them because you have more than they do.

    MIL's mentality is the same way. Her siblings have more than she does, so they ought to help her out. She's apparently having major financial problems and got behind on her house payment. One sibling gave her $2,000 to get caught back up, but what did she do? She had new carpet installed and used the rest to put a down payment on her youngest son's used BMW.

    And they just gave her the money, they didn't expect it back, but was she thankful that they helped her out? No, she's pissed they didn't give her more money.

    I would have to be a bitty though and post under their status updates "Oh you got an I-phone? How much did that cost?". Sure you'll be unfriended soon, but I could resist calling them on it.

  4. #4
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    Quote Originally Posted by NJMom View Post
    My DH felt obligated to help his only sibling however like me we knew that my BIL & SIL are not responsible when it comes to anything especially money.
    Your husband chose to give them money knowing that they are unresponsible. I would have always assumed it was a gift and if they paid me back it would have came as a wonderful and unexpected thrill.

    Write it off, quit following them on Facebook, accept who they are and move on...
    Democrats are Sexy. Who has ever heard of a good piece of elephant?

  5. #5
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    Without in any way defending these pond scum, did you really think they were going to pay you back? It's not as if they were completely responsible people who happened to hit a patch of bad luck.

    I don't mean to rub salt in the wound but why in the world would you take a loan to lend to a pair of proven deadbeat users?

    I assume you didn't require them to sign a promissory note which is always a good idea when you are lending large sums of money to anyone.

    My parents "lent" my brother and I a good sum of money to help with the down payment for our first homes. I put "lent" in parens because it was a gift but since we are all practical people we looked ahead to a future in which the source of funds might be at issue -- in our case, sadly my brother died shortly thereafter and it was good to be able to extract the sum from his estranged wife with whom he was involved in a nasty custody dispute -- but that's neither here nor there but merely to point out that there is NEVER a reason not to document the terms of an exchange of significant sums of money.

    I think you and your husband need to decide exactly what kind of future relationship you want to have with these people and act accordingly -- presumably there are no other issues such as parents which would require one to bite one's tongue.

    I would probably tell them that their lack of repayment and lack of communication has _____ fill in the blanks. My assumption is that it exhibits a complete lack of respect and affection for your husband and that your husband will act accordingly in the future.
    Some days I pray for Silence, Some days I pray for Soul,
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  6. #6
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    I think the best thing to do is to never lend a friend or family member money. I learned my lesson with a small loan to a friend and someone I worked with. Since them I have helped a family member but view it differently. If you decide to help them, give it to them. If they return the favor, great, but if they don't, they won't let you down. That also means that you have to limit yourself to what you can afford to give up so that not getting the money back doesn't stress you financially.

  7. #7
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    I'm with the majority here. If you loan money to someone who you know is irresponsible, you know (not that deep down) that you will never see that money again. I do everything I can to no longer loan money to my sister or my mother, because it just results in a broken relationship. You need to work it out in yourself to let it go and if the situation comes up again, tell them that you do not have any money to lend.
    Michelle

  8. #8
    Quote Originally Posted by Beth View Post
    If you decide to help them, give it to them. If they return the favor, great, but if they don't, they won't let you down. That also means that you have to limit yourself to what you can afford to give up so that not getting the money back doesn't stress you financially.
    I agree with this entirely. I also learned my lesson the hard way, having lent more than I could afford to lose several times. The worst part of it is that it created a bitterness in me towards those people which I struggled with for years. I hated that feeling and determined to forgive them years ago. Now I give instead of lending, and I feel so much better doing it that way.
    newcook

  9. #9
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    I learned it the hard way too (with a coworker), and over a small amount of money. It wasn't going to break me, but I was young and single and believed her when she said it was to the next paycheck. Since I knew when she got paid, I asked about it and she got huffy and stayed mad at me. She did repay me later, but we both resented the whole situation. I've felt better giving money without strings since then.

  10. #10
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    I don't fault you for giving them money knowing they weren't responsible. And I'll tell you why - in these types of situations you're damned if you do, damned if you don't as far as maintaining a relationship with the family member. If you don't give them the money, you're pretty much guaranteed on the spot that they'll be pissed and the relationship will never be the same. I know from personal experience, not just having seen it as an outsider as I described above, but being in the same situation when my sister asked me for money. If you give them the money, yes, you're taking a gamble that they won't pay you back, but maybe they will and the relationship won't be burned.

    So, point I'm making is that this situation could have easily been reversed, and you gave them the money and they did pay you back, and the relationship was ok. Where as had you not given them the money, things probably wouldn't have been the same. $2,000 is a lot of money, but in the grand scheme of things, when it's your family, I can't blame you for taking that gamble in an effort to keep the peace, when the other option was almost guaranteed not to. While many people lend money to family and friends and get burned, it's not 100% of them. Many people do pay those people back.

    Hope that makes sense.

  11. #11
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    I don't think anyone is blaming the OP for making a loan. However, if one "lends" money to someone who is fiscally irresponsible, then one can't think of it as a loan. One has to be completely okay with never seeing the money again.

    Again, without blaming the OP, it would seem reasonable to refuse to "lend" money to anyone if one had to borrow the money.

    Of course since it is the husband who lent the money it appears there is some issue since the original post implied that the poster really had nothing to do with the decision.

    Many people lend money to family members and don't really care if it is repaid because the family member either wants to make a gift (as my parents did in my example in my initial post) or because they have a reasonable expectation that the person will make every reasonable attempt to repay a loan -- and if they can't repay the loan, there would be no hard feelings.

    I once lent a friend a fairly significant sum of money when he was going through some hard times. I must say it would piss me off when I saw him enjoying dinners out and other luxuries after he got back on his feet and hadn't paid me back. I would NOT have resented the non-payment if I hadn't seen he was opting for non-essentials rather than a loan repayment.
    Some days I pray for Silence, Some days I pray for Soul,
    Some days I just pray to the God of Sex and Drums and Rock 'N' Roll.

    Meatloaf

  12. #12
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    Two thousand is a lot, but cheap compared to the trouble relatives like this can cost. When someone corners you like this it is so hard to say no. But it could have been worse- they could have asked for 5,000 or ask you to cosign a mortgage or car payment!! It is done and over. Now you have an excuse not to let them borrow any more money. They will be so busy hiding from you they can't ask for more.

  13. #13
    Are you willing to take them to small claims court? If so, I would think that the fact that they paid you something towards the loan would prove that the money was indeed a loan. Otherwise, I think you have to write it off.

    I agree with Beth. For family & friends, never loan money. If you have it to give, then give with no expectation of repayment. It's easier said than done, though, I know.

    Sorry you're going through this.

  14. #14
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    Blaze, I understand what you're saying about their financial history, and agree with you if they were friends. With family though, you feel more obligated to help them out, and you expect that they'll return that favor and make it right, they don't want to screw over their family, they will make paying you back more of a priority. Family is very important, right? In a perfect world, of course. In my experience with my family, they're the ones that are supposed to care about Shug the most, but Shug will be the first one they screw over, because they can get by with it, because I won't take them to small claims court since they're family and all.

    And you're right - it does seem like the husband and the OP weren't on the same page. He probably is more willing to let it go than she is. Been there and done that.

  15. #15
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    Unhappy Thanks......

    Thank you all for your words of wisdom and sympathy. As many of you have guessed yes my DH and I are not on the same page on this. When BIL asked for the money I was on my way into work that morning when my husband called to let me know what was going on and what I thought. Of course my first reaction was NO WAY. However DH did feel like we should help him. BIL is DH only family (both parents have passed away) so I understood how DH wanted to take the chance and believed his brother when he promised to pay it back with interest. We don't have money to burn but we do save and are very careful with what we spend. Guess we both(DH) tried to have faith that his word was good. I am just getting resentful especially when DH will ask me to be careful with the spending this month while I know that BIL & SIL could careless. What bothers me the most is their lack of ignorance and communication. If they would at least call or send a note that would at least give them some integrity in my book. Part of me wants to cut the off and never look back and part of me wonders why should we let them get away with taking advantage of family! Thanks again...I know I have to so something with this anger for them.
    Context and memory play powerful roles in all the truly great meals in one's life.
    -Anthony Bourdain

  16. #16
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    I've always heard that unless you can affort to part with the money and not expect it back, then not to loan money, ever, to anyone. I would consider it a write off, but if you are not willing to let it go, you can always go to court. I see cases like this all the time on People's Court or Judge Judy.

  17. #17
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    Assuming that you're 'done' with these people (and I would be if they're sending you $10 or $15 bucks only when you hound them and then bragging about their iphones on facebook) evidently you can take this as a write-off on your taxes by claiming a non-business bad debt deduction and the IRS will go after them (see bottom section "When Uncle Lou Becomes a Deadbeat"):

    http://www.smsmallbiz.com/taxes/Seve...ur_Family.html

    I'd talk to my accountant about it of course but if you can do this then at least it would give you some sense of satisfaction to know they're not getting off scott free.
    Linda

    When I stand before God at the end of my life, I would hope that I would not have a single bit of talent left and I could say “I used everything you gave me.”

    Erma Bombeck

  18. #18
    DmOrtega Guest
    It's too bad people can be inconsiderate but without documentation you will probably never see the money unless a miracle happens.

    I would however tell them directly through a certified letter how disappointed and hurt you and your husband are at the way they have treated you both after loaning them the money. You went against your better judgment and gave them the opportunity to get through the rough period with the agreement that the money would be paid back in regular monthly payments. It's very hurtful for you to see their fb posts about them buying new things and enjoying their projects while you are still waiting to be repaid. It's a burden that you now carry. It's hurtful that they don't respect you or your husband enough to even talk with you about the situation and it is putting everyone in an awkward relationship that you don't want for everyone. Personally, I'd just Hide their posts because you may want to keep tabs on them, after all they are still family. Beyond that I'd let it go and never loan them anything again.

  19. #19
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    Quote Originally Posted by DmOrtega View Post
    It's too bad people can be inconsiderate but without documentation you will probably never see the money unless a miracle happens.
    But she does have documentation and it can be used as proof as loan since payment and an attempt to pay back is made

    We eventually got a check for $50 which bounced! After another 5 mths of asking for payment we got a money order for $25 only with a note saying that they would be paying us $150 monthly...which was fine with us. Then again nothing from them. My husband send another email/letter with the breakdown of what they owe etc... We just got another money order for $15 only and no note.

  20. #20
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    I agree with what others said as far as writing off collecting the debt.

    What kind of relationship did DH & BIL have before the loan? I wonder if BIL is feeling crappy for not holding up his side of the bargain - especially if the e-mails and letters are more about getting payment back than trying to maintain a relationship. It doesn't make it right, but it sounds like some of your regret is the lack of communication. I may be too optimistic to hope that perhaps BIL and SIL are feeling bad about the situation, and instead of working to make it right, are just slinking in the corner embarrassed.

    So...while I totally understand sending them a letter saying how disappointed you both are - IF your DH does want to maintain a relationship with his only immediate family, would it make sense to take a deep swallow and just communicate that you would like a clean slate with them and want to be involved without adding the extra guilt?

    Again...not excusing their behavior, but if maintaining a relationship is important and you both accept that you will never receive the money back, perhaps it is time to just communicate with them about moving forward.
    Sherri

    Never look down on a person unless you are offering them a hand up.

  21. #21
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    Quote Originally Posted by SDMomChef View Post

    So...while I totally understand sending them a letter saying how disappointed you both are - IF your DH does want to maintain a relationship with his only immediate family, would it make sense to take a deep swallow and just communicate that you would like a clean slate with them and want to be involved without adding the extra guilt?

    Again...not excusing their behavior, but if maintaining a relationship is important and you both accept that you will never receive the money back, perhaps it is time to just communicate with them about moving forward.
    I agree with this.

    Also, she will be totally "off the hook" in the future in regards to loaning them money or helping them out in any way.
    Last edited by Gumbeaux; 02-08-2010 at 09:14 AM.

  22. #22
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    Quote Originally Posted by SDMomChef View Post

    So...while I totally understand sending them a letter saying how disappointed you both are - IF your DH does want to maintain a relationship with his only immediate family, would it make sense to take a deep swallow and just communicate that you would like a clean slate with them and want to be involved without adding the extra guilt?

    Again...not excusing their behavior, but if maintaining a relationship is important and you both accept that you will never receive the money back, perhaps it is time to just communicate with them about moving forward.
    I also very much agree with this. My heart really goes out to to you and your husband. It really is very sad. By suggesting you do this, you also give your husband a way out of this mess which must be taring him up inside. I'm very sorry he had to learn this unfortunate truth about his brother the hard way.
    A well rounded person is perfectly pointless. - Carrie

  23. #23
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    I think the only way the relationship can move forward is for you to be perfectly honest with BIL and express your feelings directly and openly. They probably already know how you feel and that's why they're avoiding you. You need to get it out there and move on.

    I think letting go of the idea of getting the money back is something of a given. That's just not going to happen. If you want to salvage any kind of relationship, I think you do as suggested with the letter. Express your true feelings, tell them where you stand and ask if you guys can move on.

    Some years back, I had an incident with one of my brothers. He is an alcoholic and was drunk at a funeral. He said some really rotten things to me, including calling me some very rude names. He and I had always had a good relationship up until that point. I knew he was sick, and I do get that. But I didn't deserve nor appreciate his treatment of me that night. It kept eating at me. I ended up writing him a letter that said just that. I didn't appreciate how he'd behaved. He probably didn't even remember the incident, but I sure did. So though I knew I wouldn't change him and would probably never get an apology (I haven't), I needed to communicate with him for my well-being. I needed to have it said. To this day, my brother and I have not been as close as we were before. But we both know how I felt about what happened.

    I think that's what's important here. You need to get it out in the open that you both know what happened and that you and dh don't appreciate it. Once that's out, I think you can begin to rebuild your relationship (if that's what you even want).

    My two cents. Good luck. Families can be so messy.
    TKay

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