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Lending Money to Family


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#1 i_s_a

Posted 17 December 2012 - 01:57 PM

I just found out last week that DH is still continuously lending money to BIL.  He slipped out jokingly something like "I better put some money in this account just in case BIL need cash to pay the bill?"  I was pretty angry when I found out that I didn't know that we are still lending money to them.  

The thing is:
They originally owned 2 investment properties however now we owned them 50/50 with them because we have been paying the mortgages of the houses that they couldn't pay and if they had to give up the house then they would incurred a big loss; so that we ended up paying it and saying after a long while that you won't be able to pay us back, we would rather half owned the house rather than risking not getting anything back.  

We also had shares in the company that BIL's partnered coz at one point they needed the fund for it to continue and until now, 4-5 years along, we still had not seen any profit or return from that.  

I just found out last week as well that on top of DH occasional paying of their house bills, BIL owes a few other family and friends money.

But this is their lifestyle; Their kids just went to holiday camp that cost $2000, they went to races in lovely outfits and hats and bet for horses three days in a week at one time, they have a spa in their backyard, $2000 lounge chair, their pet goes to pet hotel when they go for holiday, their house is full of gadgets, wii and whatever else.  

I am happy if DH helps out if they need to put food on table, or the kids don't have clothing or something to that degree. What I was angry at was the fact that we can't even afford a deposit to put for our own place while they were living like royals.  Don't get me wrong we live comfortably, but there are things that we want to have like our own house, that we need to wait to get because we don't have the money for it at the moment.  And I have been wanting to buy our own house since we got engaged some 5 years ago, just because the money that we have been saving to buy that house has been paying those mortgages.  So last week we decided last week no more.

Yesterday however, (as if he knows we were talking bout them), BIL sent a msg to DH again saying they don't have any cash or credit and he doesn't know how to get through until he gets paid (considering it it his own business he doesn't seem to get paid regularly) with bills and rent not paid yet.  He does sound really stressed out and at his really low point (I can't imagine him being that stressed out as he looks so carefree every time I see him).  I do feel sorry for him being stuck in a place that they had dug themselves.  Now DH is suggesting to me that we pay the bills and rent that necessary to be paid on terms that FIL is in charge of their finances until they can pay us back in full whatever they owe us.  This means they don't have access to their money, they are to be given allowance for food and whatever necessary weekly and bills are paid straight away by FIL.  DH is now asking me to whether I agree to that this is the best way to go.  

On one side I feel enough is enough, this has been going on for as long as I know DH.  They have to learn how to cope without help anymore.  They surely earn enough, they just don't spend wisely.  if they don't find ways to increase their income, they must find a way to decrease their spending.  And I don't want to be put in a situation that basically I can't do what I want with our money because we need to help them out. On the other side though, I do feel sorry and bad that they now don't know how to pay rent and bills.  

I need suggestion of what would you do if this happens to you?  In theory I would say don't help anymore, but if it is your siblings wouldn't you help?  So help with terms attached or just let them figure it out themselves?

Thanks for reading this ladies.


#2 i_s_a

Posted 17 December 2012 - 01:58 PM

Just realised how long it was, sorry!

#3 Tigerdog

Posted 17 December 2012 - 02:07 PM

Oh my God OP, that's outrageous!  I think it's time they cut their losses and paid the consequences for dodgy financial decisions.  Put the properties on the market, get your money back and that's the end of it.  They won't curtail their lifestyle whilever someone else is paying!

#4 QueenElsa

Posted 17 December 2012 - 02:08 PM

Stop paying them now. Just cut financial ties with them. Put money aside in an account for your home deposit so you can't touch it and there's not spare cash to give away. Are you on the title deeds for the investments? If not get your names on it now.

BIL can sell the lounge chairs, gadgets, cancel holidays and sell investment properties to get by.  FIL can keep cash for them if necessary but it shouldn't be your cash.  However professional help would be better for them.

My BIL asks for money too despite living the high life...we say no we can't help you, we don't have it.

Edited by doctorseuss, 17 December 2012 - 02:10 PM.


#5 boatiebabe

Posted 17 December 2012 - 02:09 PM

It's time for them to sink or swim on their own.

No you, no Dh, no FIL being responsible.

BIL and SIL need to go it alone, otherwise you are all enabling them.

#6 fatbelly

Posted 17 December 2012 - 02:15 PM

They need to step up for themselves and you need to be in sole charge of your familys finances so your DH can't slip money to BIL (because he will)

Never lend money with the expectation of getting it back - this is my motto.

#7 ///

Posted 17 December 2012 - 02:28 PM

QUOTE (fatbelly @ 17/12/2012, 03:15 PM) <{POST_SNAPBACK}>
They need to step up for themselves and you need to be in sole charge of your familys finances so your DH can't slip money to BIL (because he will)

Never lend money with the expectation of getting it back - this is my motto.


Agree with this.

#8 PrincessPeach

Posted 17 December 2012 - 02:31 PM

I'm sorry if you can afford a $2,000 holiday, you can afford to put food on the table, unless of course there is an emergency or something, then I would be telling them no. I'd also force their hand at selling the rental properties...there is no way I'd be funding someone elses tax cut.

#9 Mousky

Posted 17 December 2012 - 02:36 PM

I personally would (and have) suggested cash converters. My sister always wanted to borrow money off family. It wasn't until we all stopped and suggested she start pawning all her gadgets that she started being financially resposnible.

#10 i_s_a

Posted 17 December 2012 - 03:08 PM

QUOTE (doctorseuss @ 17/12/2012, 12:08 PM) <{POST_SNAPBACK}>
Stop paying them now. Just cut financial ties with them. Put money aside in an account for your home deposit so you can't touch it and there's not spare cash to give away. Are you on the title deeds for the investments? If not get your names on it now.

BIL can sell the lounge chairs, gadgets, cancel holidays and sell investment properties to get by.  FIL can keep cash for them if necessary but it shouldn't be your cash.  However professional help would be better for them.

My BIL asks for money too despite living the high life...we say no we can't help you, we don't have it.


Yup, we have our name on the properties.  We are, because of his last msg as well, now in discussion on letting go of these properties

Thanks for the suggestion on them selling their stuff to cover.  This is something I have not thought about and worth discussing with DH.  I'm pretty sure DH may see this is a drastic suggestion for them and I think BIL and SIL would have a really hard time doing this (ego thing and the realisation that it has gone this bad).  But worth discussing and somehow can't see how BIL would learn how to get out of it if this is not the way.

QUOTE (fatbelly @ 17/12/2012, 12:15 PM) <{POST_SNAPBACK}>
Never lend money with the expectation of getting it back - this is my motto.


TBH, I probably expect by now that there is a big chance that what we lend them may never come back to us.  Too much for too long already.  

Problems just seem much simpler now. Haha.  Thanks ladies.  




#11 Ally'smum

Posted 17 December 2012 - 03:23 PM

I would be cutting them off as well.

You are just enabling them and at your own expense.

When we have been asked to lend money we just say 'no we don't have it' we do have it but it is for our families future, not to prop up relatives who are living in fantasy land.

#12 i_s_a

Posted 17 December 2012 - 04:00 PM

I just quickly told DH that I think we shouldn't help anymore, but discuss further when he gets home.  TBH, I do feel really bad in making that decision although I know that it is the right one.  I feel mean and somehow think how would DH feels if it is my siblings in reverse situation that I wanna help.  

This is the problem, it wasn't even my problem. Now I feel like the bad guy.  Just venting now ..

#13 katpaws

Posted 17 December 2012 - 04:27 PM

OP, if these people were starving and looking like they were being tossed on to the streets to live it would be a different matter but they aren't. It sounds like they live a comfortable life. You are not doing anything wrong by saying enough is enough.



#14 Freddie'sMum

Posted 17 December 2012 - 04:31 PM

OP

If I was you - I would be very angry with my DH first and foremost.

Your BIL is big enough and ugly enough to sort out his own finances.  Your DH is enabling him to throw his hands up in the air and say "it's just too hard / it's too unfair" (which is what my children say to me all the time when I ask them to tidy their rooms).

Step away from lending / giving him money and ask your DH to do the same.



#15 steppy

Posted 17 December 2012 - 04:40 PM

I think you are in a bad position. The family obviously chooses to enable this ridiculous behaviour by your BIL and treat him like a child - no wonder he is always carefree - children really are.

I can't see how you can deal with it without causing a rift between your husband and FIL and BIL.

Honestly, no, I don't think I could continue to put up with it while my own needs continued to be put on the back burner. I think I would try this idea with FIL paying them an allowance only, but if FIL has spent this long enabling this behaviour, do you think it will really work? And will you have the opportunity at the end to stop any further paying out when the arrangement is over?

#16 i_s_a

Posted 17 December 2012 - 06:32 PM

QUOTE (steppy @ 17/12/2012, 02:40 PM) <{POST_SNAPBACK}>
I can't see how you can deal with it without causing a rift between your husband and FIL and BIL.

Honestly, no, I don't think I could continue to put up with it while my own needs continued to be put on the back burner. I think I would try this idea with FIL paying them an allowance only, but if FIL has spent this long enabling this behaviour, do you think it will really work? And will you have the opportunity at the end to stop any further paying out when the arrangement is over?


I don't know if this arrangement would really work, until we give it a go.  In my brief discussion with DH over the phone before, he seems to think that WE don't have any option but to help him, he is leaning towards helping him.  This is what I don't like, HE is put in a situation where it looks like WE have no option.  Although FIL would help if the arrangement goes, I would feel then he thinks this becomes HIS problem as well.  

And I don't want this to become some source of "argument" between me and DH, just because we can't agree.  Obviously this is not OUR problem.  

TBH, I somehow can't see how they would stop borrowing money coz they have been doing it for so long.  As PP said I think it needs a lot more 'intervention' or professional help than just terms and conditions on loans.  






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