Lending money to family

[hinodis]

My SIL's DH got layed off from his job and they are having money problems. She called DH tonight and asked him if they could borrow a bouple thousand dollars to cover the house payment for January anad February. She said they could pay us back in the middle of February. He told her he would have to talk to me about it. I said no way. He is an independent contractor and his business is not secure right now at all. I am clinging to my money. He feels really bad that he can't help her. Am I being selfish? I am just afraid that if they can't pay us back and his business slows down, where are we?

 

[ADisneyQueen]

My uncle once said if you are lending money to someone, don't expect to get it back. If you can give it and not miss it, fine, but don't see it as a loan.
I have a family member that owes me money and I know she'll never give it back.

 

[here757]

ohhh tough spot to be in..
i can understand him wanting to help. but ive been watching too much judge judy and joe brown. my vote would be dont lend any money
and someone in need is not really gonna wanna listen to your reasons why you cant lend.

 

[yourcruise]

Its always hard to lend money out especially if you could not afford to live without it if you don't get it back.

 

[Maddle]

It's too hard to make a call on this one without knowing where you stand financially! But, if they don't have the money today, what makes SIL think she will have it in February?

On the other hand, do you have the money to lend them? Sometimes all someone needs is help over a rough patch.

maddle

 

[TiggerTails57]

If you can't afford to 'give' it then don't lend it...

 

[BarbWB]

btdt, loaned money to a close family member AND to a DH's best friend since 8th grade ... loans made 18 mos ago. Have we seen a penny? Nope!

So, the question is not whether you have the money to loan, but, do you have the money to GIVE.

If you can give the money and not worry about repayment, then it would be fine. Otherwise, I would never do it again.

And why, in this environment, would someone be asking a contractor for a loan? That is just not fair to put you in that situation

 

[WendyisDarling]

You aren't being selfish. You are forward thinking. If you have a couple thousand extra that you won't miss, then consider the loan, but know that loan could easily become a "gift".
They say they can repay in February. Maybe so, but what if...they have an expensive car repair, unexpected medical expense, a broken whatever at their house. What will happen? I'm betting you get a phone call with a promise to repay in March or April.
You absolutely cannot count on getting the money back.

I would encourage your DH to give his sis a truthful answer. She knows you have the money, so she will probably feel let down. But, if he simply explains that he doesn't feel secure about his employment and he needs to have his safety net. THEN, he could offer to help her with advising her to call their bank and discuss options for their mortgage payment until next month. Many banks are very helpful now and will work with people.

Good luck. I know (very well) you are in a tough spot.

 

[pearlieq]

As much as you would like to help, you can't put yourself at risk to help them out. Lend as much as you can afford to lose, no more.

Maybe there are other ways you can help them. Can you help with their kids while one of them picks up another job? Can you share some of your pantry stock to help them out with groceries for the month? Can you invite them over for dinner and movie night so they can have some inexpensive fun?

Good luck--I know it's a sticky situation.

 

[hinodis]

We do have the money. However, if DH has no business, we have no income. With this economy we may be living off our savings. SIL said they had no savings account.

 

[T. Lynn]

Same boat here. We loaned someone money back in June and haven't seen a dime of it back. I'm ticked off that DH did it without asking me first.

 

[Stacerita]

Loan the money only if you will be ok not to get it back. Thats how it can be with family sometimes.

 

[turnlisa]

I've been in this situation more times than I can count. Other posters are right - if you are lending to family, don't expect to get it back.

Last summer I had my aunt call me from out of the blue. Hadn't talked to her in 2 years. She asked for $2K, needed me to wire it to her or she was going to be homeless by Friday. Did I lend it to her? NO! I had the money but figured that if I was only good to talk to when she needed money it wasn't a great relationship. I still feel guilty about it but there are times when you have to make the right decision for you.

I don't know if I would lend it if I were you. I can understand helping someone out but if your DH doesn't have steady income, I would have a hard time handing over money.

 

[wdwmom0f3]

Dave Ramsey would say.... no darlin'.

I wouldn't do it unless you could give them the money and it sounds like your husband may need it in the future. (hopefully not ) I wouldn't put my family at risk right now.

 

[4boys531]

I agree with the PP's...if you are uncomfortable loaning it (and understandably so) then you have to look out for yourself first. I like the suggestions for offers to babysit, help out with food, etc.

We loaned money to my BIL but we know he is good for it. He just bought a house and started a new job, so he was short on savings. We had the money but we know he will pay us back (we have done this before too). But my DH's uncle asked us to help him out and we politely told him no since we knew we would never see any of it back.

 

[Karenj2]

On the flip side, when DH was out on medical long term disability, and I was laid off from my job at the same time, my BIL and his wife lent us $20k, to tide us over while we put our house on the market. DH was able to get off LTD, and got a good job, so we took our house off the market, then paid off BIL as quickly as we could. (We had depleted our savings, so it took about 5 months, but we paid it back.)

As others have said, be prepared to count it as a gift, not a loan, but you may be pleasantly surprised by your DH's sister and husband.

HOWEVER, if you do give a loan, you might want to consider writing up a "contract" that specifies when you expect to be paid back, and have all sign for it, so that if they don't pay you back, you might have more evidence & recourse to get paid back. (My BIL gave us the money with no strings - he even said it was a gift, but we couldn't NOT pay him back...)

 

[carj]

I know that this may sound harsh but you really shouldn't loan money that you can't afford to lose.
I would try to find other ways to help. If they can't pay the house payments now, they probably will not be able to pay the payments next month, and repay you.
It may seem cruel but the best solution may be for them to downsize and rent.

 

[brockscandy]

Dave Ramsey would say.... no darlin'.

Not only would he say that but he would tell you that it will change things at Thanksgiving dinner.

I know that it is hard not to help and I don't know what her husband does, but it is not your fault that they don't have a savings and you do. Both my MIL and FIL have told us to be prepared and save our money so we can help out my SIL when they hit hard times. She called a couple of months ago crying about their debt and I recommended she get tuned into Dave Ramsey and she hasn't talked to me since except to call me back and tell me how much I offended her.

 

[janiejake]

Wouldn't do it either. If their money habits have been such that they have no safety net~~(no savings, you said), what is likely to change in their situation? Where will they get this extra money to be paying you back along with their normal expenditures? It's a tough call, but you do need to protect your own family.

 

[WendyisDarling]

SIL said they had no savings account.

And the bread winner is laid off. It is very unfortunate.
This will probably come across as harsh, but where will the money for upcoming house payments come? Does BIL have a new job? Did sis get a job or one that pays more?

It is really easy to become a "bank" for a family member. You help them out once and it gets easier to ask the next time.