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When loaning money to family goes bad...

Member

Re: When loaning money to family goes bad...

Gunnar makes the most sense out of anyone in this topic.

 

I personally think you should write off the loan and move on.  If you are at all close to this family member in any way, taking them to court over it will destroy your relationship.  People should repay their obligations, but it doesn't always happen.

 

My father once "loaned" one of his brothers some money.  His brother subsequently moved away and I don't think anybody has really talked with him since.  This was over 15 years ago, since I don't remember ever meeting him.


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Message 11 of 50
New Contributor

Re: When loaning money to family goes bad...

Sorry if I am dumb, but why would anyone ever “lend” someone money for a bankruptcy attorney? Isn’t there a great chance that your loan will be discharged along with the family member’s other debts? I am not very familiar with banruptcy rules (thankfully).

Message 12 of 50
Valued Contributor

Re: When loaning money to family goes bad...

The relationship will destroyed if the loan isn't paid back so I'm going to do what I can to get the money back either way. I could try to tell myself that it wasn't a loan but that won't work. I'd just be lying to myself. If a person thinks enough of someone to let them borrow a sum of money like this then the person that received it should think enough of that person to repay them. And if they don't, then there is no reason to have contact with them.

 

I know some will ask why a person would loan money to someone so they could file for bankruptcy. If the person can't pay there bills then how would they pay the loan. I'd wonder the same thing. Her filing for BK saves her $250-$300. per month. So the plan was for her to pay me $100.00 per month for just over a year and she'd still be ahead of the game. And would do better after that's was taken care of.  This money wasn't included in the BK. I would have fought it if it would have been. That would have been like going on a credit card shopping spree then immediately filing for BK. 

 

 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
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Merrick - $2400 - Total - $134,500

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Message 13 of 50
New Contributor

Re: When loaning money to family goes bad...

Thanks for the explanation, that makes sense. I am sorry your trust in a family member was betrayed. I recommend moving on. Is it really worth the time or the heartache to try to recover this debt. Is it revenge that you are seeking?

Message 14 of 50
Contributor

Re: When loaning money to family goes bad...

I have an uncle that is fairly well to do. Because of this family and friends have often asked him to borrow money. He has always been willing to do so, but he sets it up just like a bank would with loan documents and all terms and conditions included. He is very clear what he will charge for interest (always better then a bank but something to show it is a loan not a gift) and that if you default he will go after the owed amount and let the family know what happened. So far I have never heard of him not getting repaid, some delays in payment but I think knowing the rest of the family will find out ensures he gets his money back.

Message 15 of 50
Valued Contributor

Re: When loaning money to family goes bad...

I wouldn't say revenge. I kind of feel like I was robbed. I can see if she had been paying me and then something came up for a month and she couldn't. But to stop contacting me the first time I ask if she sent a check up and then ignore my call and most of my messages. That's not right. No acknowledgement at all. 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
Cap 1 - $12,000 / PenFed - $10,000 / JC Penney - $10,000 / Discover IT - $9700 / Barclay Rewards - $5400
Merrick - $2400 - Total - $134,500

EQ - 753 / TU - 741 / EX - 742
Message 16 of 50
Moderator

Re: When loaning money to family goes bad...

It seems no one has mentioned the obvious (I see 1 touched on it).  This debt will be discharged in BK even if it wasnt listed on the schedules, the debt was incurred prior to the filing of BK its why attorneys dont file until they have been paid in full, their bill would be discharged. Im sorry you are going thru this and its a hard lesson to learn.

 

Your only shot at keeping this debt from being discharged is to file an objection with the BK court to it being discharged (if you still can)

"If there's a lack of money in your life, understand that feeling worried, envious, jealous, disappointed, discouraged, doubtful or fearful about money can never bring more money to you, because those feelings come from a lack of gratitude for the money you have."

"Reactions are powerful creators because they contain every element needed to manifest—they're a combination of thought, belief, and feeling in action. Positive reactions create more positive things, and negative reactions create more negative things. If you can respond to negative situations calmly and lightly, instead of with emotional turbulence, what happens next in your life will be so much better."

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Message 17 of 50
Valued Contributor

Re: When loaning money to family goes bad...

If that's the case then I'll have one less relative and she'll have a few less. I've researched this a little. A person can't rack up debt with no intention to pay then quickly file for bankruptcy. That would be fraud. 

Cap 1 - $23,000 / Lowe’s - $17,000 / Barclay Apple Rewards - $15,000 / Capital 1 - $15,000 / Walmart - $15,000
Cap 1 - $12,000 / PenFed - $10,000 / JC Penney - $10,000 / Discover IT - $9700 / Barclay Rewards - $5400
Merrick - $2400 - Total - $134,500

EQ - 753 / TU - 741 / EX - 742
Message 18 of 50
New Contributor

Re: When loaning money to family goes bad...

Consider this a lost, and don't lend what you can't afford to give. I've learned this the hard way. The unfortunate thing is that this individual has burned a bridge, which is never smart. Karma will be visiting soon. She always does.

goodcreditgirl1
Message 19 of 50
Regular Contributor

Re: When loaning money to family goes bad...

Yes, you are in a hard situation, but honestly taking her to court for such a small amount isn't worth it.  Take it as a life lesson learned, when I loan money to my friends I tell them, you don't have to pay me back if you don't want too, because they usually only ask when they are in a jam, I usually more times than not get the money back.  Someone with a bad attitude as your relative obviously didn't learn from her mistakes and will continue to get herself in the same predicament again.  I wouldn't sweat it, try not to think about it, and think of a way to make more money to put back into your savings.  It's not about how much you make, its about how much you can save in life.  Good luck.

Message 20 of 50