Friday, June 17, 2011

Loaning money to family members never a good idea...

Steve Bucci, Columnist at Bankrate.com recently published a piece titled, "Should I sue my deadbeat in-laws?" (clink on link)

A couple loaned $16,000 to her parents, brother and sister and since that time four years ago, they've never seen one single penny of repayment. I feel for this couple. Here they were trying to do something nice and it blew up in their faces.

Loaning money to family members is always tricky because non-payment can cause real rifts in the relationship, in fact it can ruin entire families. If you're going to loan money to a family member, don't. If you insist, then either give it to them outright and don't require repayment or have them sign a legal document. Heck why not even ask for collateral?

I know a guy who, after his father died, asked his mother if he could borrow $20,000 to purchase a new and rather large bucket truck for his business. In any other circumstances the mother would not have had this money but her husband had left her a few life insurance policies after his death. When the loan was requested, the guy's mother hesitated briefly because her son had purchased something from his father years back and never paid him for it, but she figured this time things would be different, he's much older and more mature. She immediately wrote him a check for the $20,000 and he picked up the truck. Last I heard, it was sitting at his house now until he can get the required commercial license to drive it. It's been almost two years and the mother hasn't seen a dime from her son or his wife. They make excuses like business is slow and such but they seem to be keeping their heads above water, pay their mortgage and car payments and even buying things they need for themselves and their house. Business may be slow but I still don't understand how they can't write a check for just $50 per month and send to the mother. It astounds the mother because she knows that several years ago the two had borrowed money from the wife's mother and they paid her back regularly. So this woman is wondering why her son and daughter-in-law won't show her the same consideration. After all, she's not working, she is on social security disability and she lives off that and off the life insurance her husband left her when he died. What happened here is a son and daughter in law took advantage of a mother's kindness. It's a real shame.

The relationship between this woman and her son and between him and other family members is now strained because of this situation. He and his wife could do the right thing and begin paying his mother back but it will probably never happen. Obviously paying his mother back is not a priority for him. All I can say is it is dishonest and shows a complete lack of character and integrity and this is not at all how this guy was raised. 

2 comments:

  1. Anonymous6/28/2011

    iNTERESTING. AND YOU'RE RIGHT...NEVER LOAN MONEY TO YOUR FAMILY.

    ReplyDelete
  2. Yeah, it's not a good idea but it's not bad though. We just need to be patient in collecting money from them

    ReplyDelete