Collecting money from a family member

[flavor]

How do you approach a sibling on repaying the loan which is close to 10K. We're not on speaking terms, which happened after the innial reminder.
Thanks.

[PrincessPerky]

this would be why you should never loan to family...I don't know of any situations where it worked out.

Is the money more important or the relationship?

If it is money then you could keep trying, if it is the relationship then you prolly have to forgive the debt (and vow NEVER to do that again)

[disneysteve]

I agree with PrincessPerky. Decide if the money is the priority. When you issued the loan, did you do it properly with a signed loan agreement with repayment terms and such or did you just hand over the money with a handshake? If you did it legit, and the relationship is not important, you can take the appropriate legal action for breach of contract. If there was no legal agreement, a loan isn't a loan, it is a gift. Chalk it up to a life lesson learned. Don't ever lend money to friends and family.

[fruitbowlk]

I loan my brother $160 and he didn't call me for two months afterwards and never paid me back. I just chalk it up to a gift and keep on moving. But I have an decision not to loan or give out money to family and friends anymore. I think immaturity has a lot to do with a family member or friends stop talking to you over money. If you don't have it just say you don't have it why stop communication? Silly if you ask me but whatever.

[familyof4]

Tough spot to be in.. so many factors play into this. Is the sibling young and any chance they will mature and realize their debt is hurting you?

If you are not on speaking terms, is this a temporary thing or you think the relationship is shot?

Is there any other family members that you can recruit to help you talk to the sibling?

Family is important and you are obviously torn about stirring the pot again. Was the "not on speaking terms" initiated on their part or yours?

Maybe you can reach out to them and try to help them repay you. By this I mean, rather than demand all of the money, maybe a payment plan will work. Can they afford even just 200 per month. Will be a long term repayment, but at least you will not be out all of the money.

And if you can do this.. do it with kindness and also get the repayment terms in writing, “BillyBob agrees to repay the loan amount of x over the course of x term for x amount per month”. This way you have in writing that there was a loan and there is no mistake about the repayment terms down the road.

Good luck

[LivingAlmostLarge]

Never "loan" money to family. It's a goner.

[familyof4]

I disagree with everyone who says not to loan money to family or friends. That is a general statement that is not always true. I have loaned and have borrowed money from family before.

I have always paid back, and even if not in the most timely manner.. they were always aware that I was trying.

It is like everything else. If you have famliy that is in a tough spot, it is okay to loan if the details are established up front. Most times they are borrowing in a pinch, but you as the lender need to have a level head and set down terms.

for example, when adding on to our home, we borrowed money from my parents. 6k for materials. We set up terms and set up an auto draft to their bank account. If you are careful and have enough sense to treat it has a loan, you will be fine. It also depends on the character of the person. If they are known to blow it like water, have drug habbits, enabling trash friends.. (you get the picture), you are not making a safe loan.

Now handing over a couple hundred because rent is due can be another story, you as the lender need to understand that they are in a pinch and you may not see that money back. But to hand over almost 10k without any agreement is foolish.

[Joan.of.the.Arch]

I hear of people going to their religious communities for help with family problems. I wonder if this would be something you and your sibling might be able to do. A calm person --minister?-- whom you both trust, who does not have a stake in the money outcome but who will stand for fairness, compassion, and honor might be able to help you two work something out and help mend the rift.

[Bruce Wayne]

I certainly don't envy you. I've lent money to family before and it ended up never being repaid. Odd as you would think lending to family would be more secure not less.

[LuxLiving]

I just read ?somewhere? that the best chance you have of collecting a family debt is to forgive them by saying something akin to "It's up to you to decide how you want to handle repayment of the money I lent to you." Then forget it.

I'm not sure I could do it.

[familyof4]

well, like I said before.. it is all in the way you present it. Help them find a way to repay you, lay a little guilt on the situation. "Lil Bobby needs braces this year and Jim and I had a huge fight about where we would get the money... blah blah blah"

Make it sound as if they are helping you out by repaying the funds. "It would really be a big help to us if we set up a payment plan".

If they are a decent person, they will do the right thing. If they are not a decent person... don't go out of your way to enable their actions.

If push comes to shove... shame is a great motivator. At the next family picinic let it slip to the chatty kathy of the bunch.. "BillyBob must be down and out because he has not been able to repay any of the 10k he borrowed from us". Once a family rumor sets in.. it will either motivate them to approach you to settle up and clear their name.. or it may even put the thought in others mind not to lend to BillyBob.

[brig2221]

I had the same exact thing happen to me with my sister 2-3 years ago. I lent her and her husaband $500 as they needed it, or else a chain of checks etc would bounce. I told her that I didn't have a problem lending her the money, but that I expected it back. I went through great lengths to make it easy for her. I told her that it really didn't matter to me whether repayment ocurred a month later, or 8 months later, only that whatever date SHE CHOSE would be adhered to. I made the specific comment that the very last thing I ever wanted to have to do was chase my own sister down for money.

She picked a date 2-3 months out, and that date came and went. I called her a week or so after the date passed, waiting to make sure it wasn't a check in the mail issue, and my calls were dodged. I finally got her on the horn, guessing she didnt check caller ID when she answered, and she quickly gave me the whole the check is in the mail thing, don't freak out. So I waited another 2 weeks, leaving no possibility of the check in the mail thing, and then could not get ahold of her for a good 1-2 months of trying.

Her husband was in the military, and they were being shipped to Germany, so I reached out to her a few weeks before they left telling her that I was sorry for somewhat harassing her for the money after the fact, and that her our relationship as brother and sister was more important than $500. I belive I got her to text me once or twice, but could never get her on the phone. I believe she was too embarassed to even speak to me.

I only recently after the birth of our first child, and her first nephew, have had the chance to speak with her on the phone. I feel there will always be a splinter in our relationship because of $500, how silly.

Anyhow, the point of my story, and what I learned from this experience and a friend the hard way, was that if you give money to a family member, you give it as a gift not expecting repayment. If you can't afford to do this, then you should politely decline the loan request. Anything other than this, and you are asking for trouble, take it from me.

[DebbieL]

Wow - 10K isn't exactly chump change. I'm sorry this has happened. I think you may be SOL unfortunately. Do you have something formal signed?

PS - This is EXACTLY why I would never loan money. If the bank doesn't think they're a good risk then neither do I (since 10K is a type of loan one would normally have to go through a bank for).

[familyof4]

My uncle had a funny story about borrowing money from family.. I will probably screw it up and it is very entertaining to hear him tell it with expressions and all.

In the old days when he was young in the 40's and 50's and family all helped out, kids had part time jobs and times seemed to be simplier. He was 17 and he and his cousin Jimmy were going to head out on a Friday night cruising and seeing friends. His cousin was going to drive and did not have any gas money and very little spending cash on him. So Jimmy went to his grandfather and asked to borrow 10.00. His grandfather said it is up in the red tin can on top of the fridge, be sure to put it back when you have it. Jimmy said sure thing and out they went.

Well two weeks later, Jimmy needed to borrow a few more dollars and again went to his Grandfather to ask. His grandfather calmy said, without looking up from fixing his radio at the kitchen table, go ahead.. it is up in the red tin can on top of the fridge. So Jimmy reached up and opened the can only to find it empty. Shocked, he asked his grandfather where the money is. His Grandfather replied, it should be in there... you put it back.. right? Jimmy silently walked out of the kitchen.

I guess the point is fool me once, shame on you... fool me twice Shame on me.

[fruitbowlk]

Originally Posted by familyof4

My uncle had a funny story about borrowing money from family.. I will probably screw it up and it is very entertaining to hear him tell it with expressions and all.

In the old days when he was young in the 40's and 50's and family all helped out, kids had part time jobs and times seemed to be simplier. He was 17 and he and his cousin Jimmy were going to head out on a Friday night cruising and seeing friends. His cousin was going to drive and did not have any gas money and very little spending cash on him. So Jimmy went to his grandfather and asked to borrow 10.00. His grandfather said it is up in the red tin can on top of the fridge, be sure to put it back when you have it. Jimmy said sure thing and out they went.

Well two weeks later, Jimmy needed to borrow a few more dollars and again went to his Grandfather to ask. His grandfather calmy said, without looking up from fixing his radio at the kitchen table, go ahead.. it is up in the red tin can on top of the fridge. So Jimmy reached up and opened the can only to find it empty. Shocked, he asked his grandfather where the money is. His Grandfather replied, it should be in there... you put it back.. right? Jimmy silently walked out of the kitchen.

I guess the point is fool me once, shame on you... fool me twice Shame on me.

I love this story.

[maat55]

Originally Posted by familyof4

Tough spot to be in.. so many factors play into this. Is the sibling young and any chance they will mature and realize their debt is hurting you?

If you are not on speaking terms, is this a temporary thing or you think the relationship is shot?

Is there any other family members that you can recruit to help you talk to the sibling?

Family is important and you are obviously torn about stirring the pot again. Was the "not on speaking terms" initiated on their part or yours?

Maybe you can reach out to them and try to help them repay you. By this I mean, rather than demand all of the money, maybe a payment plan will work. Can they afford even just 200 per month. Will be a long term repayment, but at least you will not be out all of the money.

And if you can do this.. do it with kindness and also get the repayment terms in writing, “BillyBob agrees to repay the loan amount of x over the course of x term for x amount per month”. This way you have in writing that there was a loan and there is no mistake about the repayment terms down the road.

Good luck

In most cases, when a family member wishes to borrow money from another family member, it's because they couldn't get the money from a bank, or they felt they would be turned down. In either case, they are a financial risk. You should no more lend money to a family member than a bum on the street.

If a family member or friend is in dire straits due to circumstances beyond their controll, you can give them money and if they wish to pay you back, fine. But in many cases, they may have made choices that got them where they are by their own fault, such as buying things they don't need and not saving an EF.

[geojen]

Originally Posted by familyof4

well, like I said before.. it is all in the way you present it. Help them find a way to repay you, lay a little guilt on the situation. "Lil Bobby needs braces this year and Jim and I had a huge fight about where we would get the money... blah blah blah"

Make it sound as if they are helping you out by repaying the funds. "It would really be a big help to us if we set up a payment plan".

If they are a decent person, they will do the right thing. If they are not a decent person... don't go out of your way to enable their actions.

If push comes to shove... shame is a great motivator. At the next family picinic let it slip to the chatty kathy of the bunch.. "BillyBob must be down and out because he has not been able to repay any of the 10k he borrowed from us". Once a family rumor sets in.. it will either motivate them to approach you to settle up and clear their name.. or it may even put the thought in others mind not to lend to BillyBob.

This may work. Family guilt is a great motivator in some families, but it will really depend on the family dynamic. It's worth a try, in any case.

No offense to all the posters, but this is one of the only replies that had actual advice in it, rather than "you shouldn't have done that." Obviously, the OP realizes this and probably won't do so again.

[Joan.of.the.Arch]

I think I gave real advice--a mediator. I also disagree with the rule of thumb that one should never lend money to family. I actually find pretty shocking the idea of withholding from family. I think one should go all out for family and be able to count on family to go all out for oneself--including by doing all possible to repay a loan. I cling to a Three Musketeers attitude about family.

[disneysteve]

Originally Posted by Joan.of.the.Arch

I also disagree with the rule of thumb that one should never lend money to family. I actually find pretty shocking the idea of withholding from family.

I never said to withhold from family. I send not to lend. There is a big difference. If someone close to me was truly in need, I'd certainly GIVE them what I could to help out. It wouldn't be a loan. It would be a gift. If they chose to repay it in some way, that would be terrific (and I might or might not accept it). I think, in general, lending money is a recipe for trouble. Obviously there are exceptions, but as rules of thumb go, I think not lending money to friends and family is a good one.

[LivingAlmostLarge]

Lend = no. Give = yes.

Gotta be a gift because it's not coming back. I learned that the hard way. So it's a gift that is gone.