Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




Loans to a Family Member

Reply to topic
Money Talk > The Green Room

Author Thread
sickofloaningmoney
New Member


Cash: $ 0.85

Posts: 4
Joined: 02 Feb 2015
Location: Jupiter
Loans to a Family Member  Reply with quote  

Hi Money Talk Forum Members,

I am new to this forum, however, I am in a bit of a predicament and not only want some advice, but want to get some steam out. Here is my issue:

Over the course of a couple years, I made several loans to a family member (call him "Joe") of mine (ultimately, to my regret). Each time a loan was made, Joe kept promising the loan would be repaid in "a week", "a month", or recently, "a year". All the while, Joe is buying lottery tickets repeatedly and traveling.

I got extremely fed up with this and called on an attorney to send a letter to wake Joe up, and while it did wake him up, I believe; it also specifically said "As such, please direct any future communications, in regard to this matter, to this office." Oddly enough, Joe called ME. A simple request like the one my attorney said, and Joe couldn't even follow that.

Anyways, Joe and I go back and fourth for a couple days (still, ignoring my attorneys demand for Jow to contact my ATTORNEY). I ask Joe to pay SOMETHING per month rather than throwing away money (~$10/week or ~$40/mo) at lottery tickets. Joe kept responding (and actually had the audacity to raise his voice at me) that "I would pay you if I could". Pretending I believed him when he said he had no money, I suggested he: clean houses, walk dogs, house/dog-sit, etc…. and what did I get in response - a snappy and snarky response of "funny that's coming from you."

Before I continue, It's important to mention Joe has threatened bankruptcy if I sue him (which was also in the letter).

After taking a day off from our conversation, we spoke again the next day, and I told him the only condition upon which I would drop these charges is if he sent SOMETHING per month ($5, $10, ext…). Yes, he'd have to cut into his lotto ticket purchases, but this would at least serve as "good faith payments" and would show he was serious. Guess what? He refused.

At this point, I've got half a mind to call Joe back up and tell him something to this extent: "As long as you have my money - I will dictate when, how, and on what frequency you are to repay the loans. You do not make those terms." However, given his responses and attitude in the past (BTW: this is not on his credit, or on a contract at all - another regret of mine in retrospect.), I wonder if this would even be a worthwhile phone call to make.

I've already dropped the charges with my attorney (and I intend to call him today and confirm he got my email making that request), so I am a bit confused. He's family, but there's a line in the sand, and It's really pissing me off. He's had two years to make some changes, and I have seen NO progress being made. We live 1300 miles apart - so small claims court is a nuisance to say the least. Any ideas? Suggestions? Comments?
Post Mon Feb 02, 2015 6:14 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 383.10

Posts: 1885
Joined: 09 Feb 2009

 Reply with quote  

As Dave Ramsey says "If you make decent money and can afford to forgive this loan and call it a gift, then I would just draw it up as a stupid tax". Meaning since you didn't have him sign any document that proves he was going to pay you back, then that is your fault. Just call it a gift and never loan him money ever again. Might even save your relationship with this family member.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Feb 02, 2015 8:42 pm
 View user's profile Send private message
sickofloaningmoney
New Member


Cash: $ 0.85

Posts: 4
Joined: 02 Feb 2015
Location: Jupiter
 Reply with quote  

Thanks for your input. I forgot to mention, he has admitted to owing the money in email, so my lawyer said it was a contract.

As far as the gift, that may very well be what I do, but I'd like to exhaust all other choices first. We are talking about $8600 (approx) in loans currently outstanding.
Post Mon Feb 02, 2015 8:45 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 383.10

Posts: 1885
Joined: 09 Feb 2009

 Reply with quote  

I agree if you want to be paid back and there is a possiblity that this could occur, then try. But if you don't see that happening and don't want to take legal action, then just consider it a gift.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Feb 03, 2015 8:35 pm
 View user's profile Send private message
Wino
Senior Member


Cash: $ 113.80

Posts: 560
Joined: 03 Aug 2012
Location: Dubai
 Reply with quote  

I loaned money to family members. Upon transferring the money, I handed them a copy of the "contract" which spelled out the terms and conditions, including penalties for not paying on time.

I then said, "If you don't pay, I won't be taking you to court, so there is no need for you to sign it. I have written everything down before giving you the money so you are 100% aware of what is transpiring."

If they don't pay, then I'm out the $20,000, as I won't sue them. Nor will I ever loan them more money. So far, they are well ahead on payments and will probably have the money paid back several years before the "contract" term expires.

Next time something like this comes up, I suggest you treat the situation as a business transaction as I did. It will alleviate this type of situation in the future. Your choices now are to write it off, sue, or nag.

What he does to come up with the money (lotto ticket purchases) has absolutely NO BEARING on your relationship or this transaction. Do NOT tell him WHAT to cut out. Just say, "You need to come up with $25 every month, or I will be forced to sue." You can change the amount and term to whatever you think is fair or needed.

If he says, "I can't do that. I'll declare bankruptcy," just say, "What you do is up to you. I loaned you this money in good faith, and you have not repaid according to our original terms. I have now relaxed the terms, but I insist you honor your commitments."

Then follow through. This is no longer a family matter. It is a business transaction between a creditor and a debtor.

The family members I loaned money to were my daughter and her husband. There is absolutely no animosity, and the loan has no bearing our our relationship. Were they not to have paid, perhaps I would be upset, but as everything was 100% recorded and agreed, the transaction is proceeding according to the terms we laid out.
Post Wed Feb 04, 2015 5:57 am
 View user's profile Send private message
sickofloaningmoney
New Member


Cash: $ 0.85

Posts: 4
Joined: 02 Feb 2015
Location: Jupiter
 Reply with quote  

Wino,

Thanks for that very thorough reply. I will be sure to keep that in mind next time we (Joe and I) discuss this matter.

Thanks.

Best Regards,
sickofloaningmoney
Post Thu Feb 05, 2015 5:49 pm
 View user's profile Send private message
GeraldBryan
New Member


Cash: $ 1.25

Posts: 6
Joined: 01 Feb 2015

 Reply with quote  

It really depends on what you are willing to do. Loaning money to friends and family members is a dangerous position, primarily because you are giving money to people who you cannot (or probably do not want to) get rid of. As such, I have seen countless issues arise because the person taking the loan knows that their other party will not demand the money back.
Post Wed Feb 11, 2015 7:10 am
 View user's profile Send private message
sickofloaningmoney
New Member


Cash: $ 0.85

Posts: 4
Joined: 02 Feb 2015
Location: Jupiter
 Reply with quote  

quote:
Originally posted by GeraldBryan
It really depends on what you are willing to do. Loaning money to friends and family members is a dangerous position, primarily because you are giving money to people who you cannot (or probably do not want to) get rid of. As such, I have seen countless issues arise because the person taking the loan knows that their other party will not demand the money back.


Thanks for the input.
Post Mon Feb 23, 2015 9:48 pm
 View user's profile Send private message
grimdispatcher
Member


Cash: $ 3.25

Posts: 16
Joined: 15 Jan 2015

 Reply with quote  

Honestly, I find it more difficult to give out loans or even get a loan from a family member since it can be a root of a misunderstanding most of the time. Take time to read this.

[/url=http://www.kiplinger.com/article/credit/T035-C000-S002-smart-ways-to-loan-money-to-family.html[/url]
Post Thu Aug 13, 2015 9:00 am
 View user's profile Send private message
Kimberlie Broe
Full Member


Cash: $ 19.60

Posts: 90
Joined: 07 Jul 2014

 Reply with quote  

This is why I don't loan money to anyone twice if he hasn't been able to fully pay his last debt first. I only do for emergencies like for hospitalization.
Post Tue Sep 15, 2015 12:58 am
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016