Large loan to a relative in need............a weird vent - Mothering Forums

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#1 of 18 Old 09-03-2013, 08:56 AM - Thread Starter
 
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I just mailed a check for $8,000 to a dear relative that is truly in need of funds.  She is almost 70 and her son is 40.

 

She and her adult son have gone through all their savings since her son quit his job (a year ago) with the federal government because of ethics (he had the ethics and was a whistle-blower).  He was their sole income provider.  She has a very small retirement pension (from 25 years working as an officer at a bank) and SS, but had to let her insurance lapse because of lack of funds for premiums.  His insurance stopped when he quit the job, but his life-saving medications had to continue and are very expensive (genetic disease).  His health (heart problems and spinal deformity) prevents him from doing any type of heavy labor, he would if he could.  They have always cared for each other.

 

They live very frugally and he has been applying non-stop for jobs in his field (doctorate-level biological science).  He has high hopes for his most recent applications.  These are good people and not slouches.

 

We talk to each other a couple of times a week (she lives in another city, hours away).  I called her yesterday to chat and she broke down and detailed me of their situation (facing eviction).  She'd given me no clue as to how bad things were prior to this conversation.  She told me they were planning on selling their car to keep them afloat, but I know they couldn't get enough for it to cover themselves for a month (older vehicle).  She'd been selling anything the had (books, old clothes, etc.) to bring in any amount of money.  She never asked for a thing, but wanted to let me know that they would probably be stopping their phone service and she felt she had to be honest with me about what was going on.

 

I told her we would give her a loan, to be re-paid whenever they can.  We have the money and this will have no financial impact on us whatsoever.  We are doing this because we love them and this is what you do, if you can and want to, for those that you love.

 

She didn't want to accept it and was crying, saying they hated that this was happening (well, duh) and finally agreed to the loan.

 

Then she started in about wanting to send us copies of their monthly bills and rent contract (they share a very small, 2 bedroom apartment) so we'd know where every penny of the money was going.  Then, she says she wants us to agree to a contract regarding the loan so that there won't be any bad feeling about it.

 

We don't want any of that!  We're doing this because we care for them and can do this.  If they pay us back, fine.  If they can't (or, need more money in the future if employment doesn't happen soon), that's fine, too.  We are giving them the money with no real thoughts as to getting any of it back.  

 

They wouldn't have accepted the money if we'd said they could just have it, so saying it is a loan is the only way I could get them to agree.

 

The check is going out to them today and they should receive it tomorrow.

 

She is insisting on our signing a contract (she even wants to have it notarized!) so that we can have legal recourse should they be unable to re-pay the loan.  It's crazy.  As we don't honestly expect to see the money back (I didn't say that to her), why does she think we'd go to court over it???

 

We don't want to sign any contract.  We don't want them to sign any contract.  We're doing this because we can and because we want to.  Can't that be enough?

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#2 of 18 Old 09-03-2013, 09:20 AM
 
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I totally understand. With family, actually, the best thing is to just give a "gift" instead of a loan. But I also understand her side as well. She feels badly having to accept it and wants to make it right.

One thing you could say to her is that the best way for her to pay you back is to pay it forward. Tell her that when she gets back on her feet, that it would be very meaningful to you if she helped someone else. Not necessarily with money, but with something such as volunteer work.

Another option is to ask her if there is anything else she can exchange such as knitting or if there is another craft she does. But this can also get complicated as she may feel she has to overcompensate.

Good luck. I hope she can get back on her feet soon.
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#3 of 18 Old 09-03-2013, 09:23 AM
 
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I think you're doing a great thing and I'm certain that your family members are beyond grateful. But the fact that she kept their situation secret for so long and is now insisting that this help you're giving be seen as a loan and not a hand-out tells me that she is probably feeling very ashamed of their situation and is trying to hold on to a shred of dignity through all of this. Don't take it personally! Just sign the promissory note and then throw your copy away if you truly don't care if they can never pay you back.
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#4 of 18 Old 09-03-2013, 12:03 PM
 
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Originally Posted by dalia View Post

One thing you could say to her is that the best way for her to pay you back is to pay it forward.

I love this idea! OP, how do you think your family member would respond to something like that?

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#5 of 18 Old 09-03-2013, 12:50 PM - Thread Starter
 
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Re:  paying it forward........

 

It is a nice idea, but not really practical for either of them.  Both have health problems that limit a lot of their activities.  She is going blind (can't drive anymore and reading/writing is very difficult) and has arthritis and he, as I said, has heart and spinal problems that limit his activity severely.

 

Were it not for their health problems, they would be the type to volunteer (she used to do a lot of volunteering with special needs immigrants and refugees).  Their time of having to pass-it-on to others is no more, and that is okay. 

 

We just want them to know they have a financial "safety net" with us and no need to worry about having a roof over their heads or food on their table (or, medications to keep them going).  They are the only members of my family that are worth anything and are very, very dear to us.

 

If she really does send a contract, we'll tell her the loan is contingent on being contract-free!

 

I appreciate the replies!!

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#6 of 18 Old 09-03-2013, 01:08 PM
 
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I like the idea of the loan being contingent on contract free!!

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#7 of 18 Old 09-03-2013, 04:41 PM
 
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You could let them feel good about it by signing their contact. It doesn't mean you will ever enforce it.

It is so wonderful you can help.
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#8 of 18 Old 09-03-2013, 07:16 PM
 
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I was thinking about it more. They are trying to keep their respect for themselves by wanting it properly documented. If it helps them feel better why not create the document yourself.

Find a genetic loan document. Remove all mention to when the loan has to be paid back. Make the start of payments be when they can afford it and set the interest rate at zero. Remove any mention of penalties etc.

You could have a fairly official looking loan document that helps them feel better but doesn't tie them into payments they might never afford.

And later you could always take the step to turn it into a gift. But they are obviously not ready for that now.

If you search for free loan document you will find a few options. You could also use a promissory note. That might be more relevant.
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#9 of 18 Old 09-04-2013, 06:51 AM
 
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Let them sign the contract and then shred it.  They want to feel in control and make it clear that they are not taking advantage of you.  It's about how they feel, not how you feel.

 

I'm happy you can help them out :)

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#10 of 18 Old 09-04-2013, 07:37 AM
 
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Originally Posted by grahamsmom98 View Post
 

If she really does send a contract, we'll tell her the loan is contingent on being contract-free!

are you saying you will only give the loan if it is contract free? meaning refusing to sign the contract?

 

or am i misreading.

 

i have no idea what a loan contract looks like but if she wants a contract just sign a promissory note without any time expectations. that should be enough.

 

plus i think it kinda opens up the opportunity for them to ask again. 

 

wish they lived close to you so you could go over and check on them. 

 

it must be a very humiliating time for them. 

 

to me this also reeks of past trauma over a loan. wonder if they have lost friend or family connection over a loan. 

 

who would have thought, that even with a doctorate one still gets to be in such dire financial state. sure health issues add a lot. but even then...

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#11 of 18 Old 09-04-2013, 08:33 AM
 
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I think you should do the contract.  It's very hard for some people to accept money.  And even if it's not a big deal to you, it's a big deal to them.  No matter what you say they will always feel weird about it.  Give her some peace of mind and do a contract.

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#12 of 18 Old 09-04-2013, 08:37 AM
 
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are you saying you will only give the loan if it is contract free? meaning refusing to sign the contract?

or am i misreading.

i have no idea what a loan contract looks like but if she wants a contract just sign a promissory note without any time expectations. that should be enough.

plus i think it kinda opens up the opportunity for them to ask again. 

wish they lived close to you so you could go over and check on them. 

it must be a very humiliating time for them. 

to me this also reeks of past trauma over a loan. wonder if they have lost friend or family connection over a loan.

who would have thought, that even with a doctorate one still gets to be in such dire financial state. sure health issues add a lot. but even then...

The bolded makes a lot of sense. Rethinking it and I agree just sign it if it allows them to feel better about it.

Good luck!

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#13 of 18 Old 09-04-2013, 08:56 AM - Thread Starter
 
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Well, she used to be a loan officer, so she knows how loans work!

 

No family history of loan issues, because there have never been any (loans, that is).  They've never had a lot of money (the health-related bills have always been a big bite of their incomes).  She divorced decades ago (husband had violent mental issues) so the income she had to raise their son was only her own.  She put him in private schools to have the best education she could find and she put him through college, as well.  It has been a lot of hard work and frugality of wants-versus-needs.  We are very proud of both of them.

 

Doctorate or none, his health issues + whistle-blowing have not helped in the job search.  Without health insurance, for either of them, all the medical-related bills have come out of pocket since he quit his job.  It is a huge amount each month, so dire straits arrived pretty fast.

 

Of course we are giving them/loaning them the money whether or not they demand a contract!!!  We love them and the money is there for them.  She said they actually needed less than we are sending them, we just thought the extra would give them even more breathing room.

 

Like I said, if they pay it back, fine.  If they can't, it doesn't matter to us.  It is what it is.

 

They should be receiving the check today and we're just glad we can do this for them.  They are good people and we love them dearly.

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#14 of 18 Old 09-04-2013, 10:29 AM
 
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Well, she used to be a loan officer, so she knows how loans work!

AHA!!! that makes sense. she knows how the system works AND she probably has seen families torn apart due to monetary issues. and she doesnt want that.

 

so you know they have regular medical bills, and now that you know they need some $$$s to get them through till the son finds work, and you definitely want to help, it seems like you will have to help every month till they find their feet. 

 

i hope they/she make/s it easy on you to allow you to help them in any way you want to help. 


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#15 of 18 Old 09-06-2013, 10:06 PM
 
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You probably already resolved thus but since she is getting public assistance it has to be a loan or they lose their assistance. For tax reasons a loan also makes sense. Cash would be easy for them to hide but a check requires a loan.
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#16 of 18 Old 09-07-2013, 06:56 AM - Thread Starter
 
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You probably already resolved thus but since she is getting public assistance it has to be a loan or they lose their assistance. For tax reasons a loan also makes sense. Cash would be easy for them to hide but a check requires a loan.

 

They have not and are not receiving any public assistance, whatsoever, and will not be getting any in the future.  We'll see to that.  We can afford to help them as long as it takes..

 

They received the check on Thursday and were thrilled.  They paid their back rent (their landlord has been really nice about everything) and will have room to breathe for awhile now.  She agreed to no contract / no interest, which is how we want things to be.

 

Everyone is now happy!

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#17 of 18 Old 09-07-2013, 07:21 AM
 
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It is nice that y'all can help them, but if their situation is unsustainable, they should be getting assistance. Also it seems like the son needs some career counseling. It doesn't help HIM not to have meaningful work @ 40 with an advanced degree.

Maybe you could help them get on the new insurance exchanges. I am afraid their medical bills will outstrip even your ample ability to help quickly.
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#18 of 18 Old 09-07-2013, 07:26 AM
 
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They have not and are not receiving any public assistance, whatsoever, and will not be getting any in the future.  We'll see to that.  We can afford to help them as long as it takes..

They received the check on Thursday and were thrilled.  They paid their back rent (their landlord has been really nice about everything) and will have room to breathe for awhile now.  She agreed to no contract / no interest, which is how we want things to be.

Everyone is now happy!

That's great. Best of luck to them and to you!

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