What do I do when my in-laws have too much debt?

[Texasgal]

My in-laws had so much debt and such poor credit scores that they talked my husband into borrowing money for them. At this time we weren't dating but today we are married. He has not loaned them any money in the past 5 years since we have been together, though he rejected them twice (last year was most recent and his mother was mad at him for saying no but she got over it).
While we are set against giving his parents any money, I'm worried his siblings may one day be in a lot of debt too. He has a sister who is a junior in college and a brother who is a freshman. We both fear his parents may get them to take out personal loans as they made my husband do. Also Their family never talks about money so he doesn't talk much with his sibling about money (but they don't work other than summers at this point).
We have a baby on the way and my husband has been great not going into more debt for his parent. We are paying off debt and saving for the baby. But I only worry what may happen a few years down the road. Even though I don't want to give his siblings money I don't want to see them struggle with debt either which isn't from their own mistakes like a new car or credit cards or something.
Does anyone else have a similar story or any ideas on what I can or should do?

[TheKayla]

Unfortunately, you can't really do anything. You're smart about taking care of yourself first, and not loaning more money. People will only change when they want to change, and enabling bad money habits by giving/loaning your hard earned money to family or friends doesn't solve the problem. You're doing the right thing but refusing to loan any more, now and in the future.

What you can do is offer your support and help, not by giving money but by helping in other ways with advice and education when they seem to need it. If they ask for more money, perhaps offer an hour of your time to help them with a budget. Or give them resources or links to places like this forum for support. Offer emotional support and education, but all in all, understand that you can't change someone, only they can change themselves. Just keep positive and only worry about your own finances and well being. It's natural to worry about someone else that you care about, but it's also important to realize it shouldn't take up too much of your emotional space because there is little you can do, and really, it is not your problem, it's there's that they'll solve on their own terms when they're ready.

[snafu]

Like you, I wish there was a magic formula or perfect words to offer someone you care about to get them to understand basic rules of money management. In this instance if you believe siblings need to be cautioned about their parent's willingness to exploit them, only DH can intervene. Perhaps suggest they listen to the Ramsey podcasts or read one of the books like Debt Free for Life [David Bach] The Wealthy Barber [Chilton] . Don't expect them to follow your lead, it just doesn't work that way. DH can explain his experience and offer to help.

[dczech09]

This is more of a boundaries issue, rather than a money issue. It is good that you and your husband have put your foot down and said "no."

What I would do if I were your husband-
I would be open with my siblings and explain that I had loaned our parents money in the past, and I was wrong to do so. I would explain why it was a bad idea, but most importantly I would want to make sure my siblings knew what happened just in case our parents came to them for money in the future. (*This is what I would do if I were in such a situation*)

At that point, it is all out of your's and your husband's hands if his siblings were to lend the parents money.

The mother has absolutely NO right to be upset that your husband would not lend her money or take out loans for her. Absolutely ludicrous that she be upset! She needs to quit being a baby and grow up. Her children are grown up and are busy worrying about their own household and finances, so she should not expect them to help her just because she is their mother. She cannot play the "mother" trump card when it comes to finances.

I am glad that the family dynamics do not work out like that in my family. Money is an open topic in my family, mainly because of me , but guilt trips do not work with us.

But yeah, your husband should be open with his siblings. He can also offer to help set up a budget or something. But lending money and taking out loans for a loved does not work because the loved one will just become dependent. And that is where relationships become intoxicated.

[figuringmoneyout]

This is definitely more of a boundaries issue than anything else. Your husband seems to be better at saying no now and setting boundaries but it's something that probably should be discussed with all members of his family. If you both fear for his siblings, then talk to them! Tell them what is appropriate and not and how to protect themselves for the future. It might be an awkward conversation but not talking about boundaries is what causes silly situations like this.

[adamb]

I read your post and joined the forum just to respond. I am in a very similar situation. I have been married to my wife for 5 years and we have been together for 8 and we have 2 kids (2 and 4). Her mother, 2 brothers and sister are horrible with money. They have been evicted from more apartments than I could count. They take our more payday loans than they can handle and are always broke. There is always a sob story and to an extent I understand.

The key for you and your husband is to communicate with each other and set explicit boundaries for what you are and are not willing to do to help. Never expect to be repaid any money that you lend. It would probably be beneficial for you and your husband to express your concerns to his siblings and explain using your own experiences. However, if they decide to lend money or take out loans, that is on them.

You cannot feel responsible to clean up everyone's messes. Your responsibility is your husband and your child. The rest are adults and can manage themselves. It is important for you to be careful with the advice you give. Unsolicited advice can have very negative consequences. (I learned this the hard way.) If they ask for your advice, give to them straight and do not sugar coat it.

As I mentioned, these are all lessons that I have learned by going through them. I have given thousands of dollars, let them live with me for months at a time and had more arguments than I would like to have with my mother-in-law. As many of the other posters have stated it is about setting boundaries and managing expectations.

As my dad always tells me "never overestimate your ability to change someone else and never underestimate your ability to change yourself." I'm sure someone famous said it but he likes to tell me he made it up.

Hope this helps and good luck.

[agarlits]

My in-laws had so much debt and such poor credit scores that they talked my husband into borrowing money for them. At this time we weren't dating but today we are married. He has not loaned them any money in the past 5 years since we have been together, though he rejected them twice (last year was most recent and his mother was mad at him for saying no but she got over it).
While we are set against giving his parents any money, I'm worried his siblings may one day be in a lot of debt too. He has a sister who is a junior in college and a brother who is a freshman. We both fear his parents may get them to take out personal loans as they made my husband do. Also Their family never talks about money so he doesn't talk much with his sibling about money (but they don't work other than summers at this point).
We have a baby on the way and my husband has been great not going into more debt for his parent. We are paying off debt and saving for the baby. But I only worry what may happen a few years down the road. Even though I don't want to give his siblings money I don't want to see them struggle with debt either which isn't from their own mistakes like a new car or credit cards or something.
Does anyone else have a similar story or any ideas on what I can or should do?

To be completely cut and dry you need to make sure the in laws are cut off. Do not loan them money under any circumstances because they obviously don't know how to handle it. Next you need to have your husband actually sit down, probably with you as well and have a talk to his siblings about the situation. Following this I would encourage his siblings to get into some sort of financial planning classes such as Dave Ramsey's Financial Peace University. Not so they can follow his teaching blindly but so they can get on a path to building a solid foundation of personal financial knowledge and develop accountability. After that is said and done I would urge his parents to seek financial counseling, I would save this for last however as they are obviously stuck in their ways and will almost definitely be resentful. I really hope that helps and I'm sorry for your situation.

[adamb]

I definitely agree with agarlits that exposing the siblings to Dave Ramsey's Financial Peace University would be an excellent way to introduce them to some great financial ideas. As agarlits mentions, they don't have to follow it word for word but it gets them thinking in the right direction.

[Pari77]

Nothing...thats there problem.

[sdcarwile]

Yes, we have been in similiar situations. My husband has cosigned 2 loans for both of his brothers and we have loaned his parents several hundred dollars several times. The 2 loans both ended up deliquent and we would get calls after calls from collection agencies. DH had no notion of ever paying their loan from them cause you know, they promised they would take care of them, but you know how that goes. We had bills and 3 kids of our own to take care of and I think back then we were only making less than 40K. That was several years ago and everything was finally taken care of but DH credit score did take a hit. We were NEVER late or deliquent on any of our own payments but we did a refi last year on our house and his credit score is def. not where it should be. So....never cosign for a loan unless you are serious about paying it off yourself. DH parents did eventually pay us back even if it was months down the road. They were both working full time and made more money than we did. His family is just horrible with money.

I don't think any of his family has asked to borrow money in a few years.

[samuelwright]

I agree with what the others above have said above. I've had two siblings contact me in the past few years and ask me to co-sign on loans. I politely declined. In both cases, they insisted that it would not impact me. They would make sure the loans got paid. It's difficult to tell somebody (especially if you care about them) that the mere fact that they are asking another person to co-sign a loan is a sign of poor fiscal skills.

The only exception I would make would be to help a family member with medical expenses if their life was in jeopardy. And, in such a case, a loan would not be made. I would give reasonably (after a full evaluation of their financial situation.)

[bigdaddybus]

I had a coworker tell me the following years ago and I found it benificial. She said "It is ok to loan family money if they consider it a loan and you (and your spouse) consider it a gift. Don't loan out more than you can afford to gift"

I think this is a good approach to take.

[RobertReyna]

You can lead a horse to water, but you cannot make it drink. You could give money to your in-laws, but chances are that you are never going to see it again. You have to ask yourself “is it worth it to lose this money (and can I afford to do so) or should I just keep out of it. I’ve seen families torn apart over bills and loans.

[Weird Tolkienish Figure]

My in-laws had so much debt and such poor credit scores that they talked my husband into borrowing money for them. At this time we weren't dating but today we are married. He has not loaned them any money in the past 5 years since we have been together, though he rejected them twice (last year was most recent and his mother was mad at him for saying no but she got over it).
While we are set against giving his parents any money, I'm worried his siblings may one day be in a lot of debt too. He has a sister who is a junior in college and a brother who is a freshman. We both fear his parents may get them to take out personal loans as they made my husband do. Also Their family never talks about money so he doesn't talk much with his sibling about money (but they don't work other than summers at this point).
We have a baby on the way and my husband has been great not going into more debt for his parent. We are paying off debt and saving for the baby. But I only worry what may happen a few years down the road. Even though I don't want to give his siblings money I don't want to see them struggle with debt either which isn't from their own mistakes like a new car or credit cards or something.
Does anyone else have a similar story or any ideas on what I can or should do?

Nothing you can do. However, I would do my best to keep as much as you can separate. And do not cosign on any loan under any circumstances.

[Fishindude77]

I've given some money to a couple friends and family knowing full well I would likely never see a dime returned to me. They needed it, I had it and it didn't hurt me, no big deal, glad to do it.

Have also had a couple cases where they were just plain lazy or insanely stupid with their money and I was approached for help. In these cases, rather than gift the money I offered to provide work as an opportunity to earn some money and help them out. One time we made that work and I got a bunch of chores and work done around my place, but in most instances they just went their own way and likely fleeced someone else.