Frustrating In-Laws

gossfam1 · 7 November 2012 at 1:51PM

Hello,

I’m looking for some help with a stressful situation I’m currently in.

My wife and I both work full time and are in good jobs and I like to think are knowledgeable and responsible with our money.

Unfortunately my wife’s parents are on a low income (work with income support) and have significant debt. They are financially very naive and don’t like talking about money.

In 2009 they asked for help as they were in mortgage arrears with a 2nd charge company (Blemain Finance – don’t get me started on them!) who were about to take them to court.

We lent them £4,000 to clear the arrears and I made it clear that I wanted to help them budget and make cutbacks so they didn’t get themselves into that position again. Unfortunately I wasn’t strong enough with them and didn’t follow through with it. Time went on and no mention of paying anything back was discussed. We’re not wealthy and it’s not thought I didn’t miss the money, but I thought of the money as being in a ‘bank’, waiting there for if and when we needed it.

Things got worse in Nov 2011 when out of the blue came another phone call from them saying they had built up £3,000 in arrears, but this time Blemain had obtained the CCJ and they were one week away from being evicted. I spent a frantic week talking to Solicitors, Blemain and the Court Bailiff. If the house has been repossessed, they would have ended up penniless and on the streets.

We were faced with an impossible choice, lend them more money to clear the arrears and stop the repossession or ignore their pleas for help and know we would probably loose the £4,000 we had already lent them.

We choose to lend them the money, but I made it very clear that a condition of taking the money was that I took some control of their finances and that they sold the house after Christmas on the open market to repay me and get rid of Blemain, who were every bit as bad to deal with as their reputation suggests.

We visited near Christmas last year and they fought me tooth and nail to prepare a SOA and budget. Of course I found some craziness, like spending £70p/m on sky, £80p/m on mobiles and having a car they couldn’t afford. However as much as I told them to cutback, they didn’t act on my advice.

When we discussed putting the house on the market, his opinion was that it needed doing up first. I have known them 10 years and they’ve always been trying to do up the house! Even in the state the house is in, I think if they sold it there should be at least £30,000 of equity left in the house once mortgage companies and me are paid of.

I want them to sell, move into cheaper rented accommodation and use the equity and any mortgage payment savings to prepare for retirement in a few years time. Otherwise, they would be 120 years old before they could afford to pay off the mortgage fully with the monthly payments they are currently making.

During Easter, my father in law suffered a stroke which has taken a few months to recover from and I agreed with my wife to lay off the pressure whilst he recovered.
However, he is now back working again and we are looking to move home soon and need our £7,000 back next year.

We have had several heated discussions and they are really against selling as they think renting is “throwing money away” – despite telling him it’s no different than giving Blemain 12% APR and charges!! Plus they think renting will be difficult with pets.

He has been to see CAB for ‘’option’’ of how he can ‘’find £7,000” and from what I can understand, they told him it would be impossible to borrow it, considering his CCJ.

I’m hoping that he will come to his own conclusion that his only option is to sell the house. I find it so frustrating that I know this would be the best thing for them financially as well as paying us back. They just seem to stick their heads in the sand and think it will all go away. I have concerns that should the house actually go on the market, they will even put off potential buyers or refuse reasonable offers.

My wife is distraught that her family can treat her like that and we both feel like we’ve been conned out of our money. I really want to help them be more financially secure. I don’t think they appreciate how much help we’ve (tried) to give them and how stressful it is for my wife and I considering they were literally 48 hours away from being evicted.

I have considered seeking legal help to force them to sell, but I have no formal paperwork proving the loan, and I didn’t take an additional charge on their property as I didn’t predict these difficulties. Naively, I thought a contract wasn’t necessary when lending money to family! Also, once I get solicitors involved to recover the money, any hope of a civil relationship between them and us would be over.

Sorry this story was a much longer post than I imagined, but has anyone ever been in a situation of lending someone money and finding it difficult to get back or has any advise of how to help them see sense?

Thanks,

Andy

JustinCredibleGillespie · 7 November 2012 at 2:01PM

I'm sorry to hear of your situation, there is actually a thread on this site about lending money to family & friends & the majority say that its a bad idea, which it is as stories like this are common.

With your in-laws being on Income Support they are entitled to apply for help with the mortgage interest from the Government, the form you'll need is called an MI12R and it can be sent from their local Job & benefits office.

Have a look also on the CCCS website, go through the debt remedy questionnaire and see what realistic options are available to them, they cant keep burying their head in the sand or they are literally going to end up on their a*se on the street & where are they going to want to live?! My guess would be with you and your wife.

Have a look into the things above & let us know how you get on.

JCG

xx

Niv · 7 November 2012 at 2:06PM

Hi Andy,

I have read the above, but if i have missed some detail I apologise in advance.

You say early on that:

We were faced with an impossible choice, lend them more money to clear the arrears and stop the repossession or ignore their pleas for help and know we would probably loose the £4,000 we had already lent them.

Sorry to break this to you, but in my opinion you have already lost that money unless you and your wife are willing to chase her family through the courts.
From the version of events you have described I really do not think that lending giving them another £3k will actually help you or them in the long term. You have ‘done you bit’ in my opinion, gave them £4k to put them back on the straight and narrow and tried your best to help them sort out their own affairs.
I think the only way they will sort themselves out is if they are evicted, I know it sounds harsh, but due to your past ‘discussions’ with them about their wastage and their unwillingness to sort it out last time, you will end up in this situation again in a couple of years if you bail them out again.
If you can afford to lose a further £3k (so a total of £7k total losses to you) the only way I would give this money (and it is a give, you won’t see it again, don’t fool yourself!) is if they agree to sit down with you and do an SOA and start cutting back BEFORE they see any of the money. They can of course con you by doing this then go back to their old habits right away but at least this way you have really done your best.
I know this may sound harsh but I really don’t think you losing £7k is going to help them understand.
Niv

FireWyrm · 7 November 2012 at 3:39PM

So, where do you stop 'lending' them your money? You're already £7000 in and there's no sign of them changing. I dont think you'll get your money back and the best you can do is distance yourself from this situation since the minute they are evicted, you'll be the one to shoulder the blame. If you continue paying, you might as well just take the mortgage on yourself since you've been practically doing just that by 'lending' them the money.

I'm sorry, there's little to nothing you can do in law to recover that money and any action you might take would just result in hard feelings and reduce your chances (such as they are) of recovering the money, to zilch.

I_will_win · 7 November 2012 at 3:49PM

NIV, Andy has already gave them the other £3000 last xmas, thought I should point that out,

really sad to hear,I dont have the experience to give advice, but I think its £7000 you will sadly never see again.
I hope i am wrong,please keep updating on the thread,let us know how you get on. Good Luck mate.

bargainbetty · 7 November 2012 at 4:20PM

Sadly, you have no legal recourse to recoup the money. Your only option is to go them and state that they need to set up a repayment plan to you of £50-100 per month, since they have refused to abide by the terms of the agreement to put the house on the market. Do this with your wife - you must present a united front.

They might do it for a few months, they might refuse, but you've asked. Unless and until the money is repaid in full, explain to them that you will not lend/give them another penny should they get into difficulties again, nor will you allow them to live in your home. If they are face with eviction, they will have to deal with it or be evicted.

Ultimately, you have been too kind. In bailing them out twice, you may have let them think you will keep doing it. They aren't going to pay up willingly, nor are they going to do what you want regarding the house sale. Your only chance is to sit them down now, and say that unless they go through with the sale, you will not help them out again. That might not do anything, but it will be less of a shock when you don't.

Actually, I've told a friend that I won't help him anymore, and it never fails to shock him when I refuse each request. So, good luck either way.

BTW, This will only work if your OH is on board - she is going to have to be very strong about this.

Jaspersmum · 7 November 2012 at 6:55PM

Just wanted to wish you luck, I know only to well about lending money to family!! You really cannot change people unless they want to change themselves.

My own In-Law is just the same and will bury his head in the golf sand bunker and hope for a lottery win to bail him out!!

I could have written part of your post myself in that you and your wife feel conned out of your money and cannot understand how family can treat you this way.

I did the same but to the tune of £25,000! It has completely soured the relationship with the family member and I will never trust them again - I don't trust anything they say anymore and the excuses as to why they have not changed their ways are getting more and more ridiculous!

Anyway I hope you manage to sort something out, but I think like me you are in an impossible situation.

JM

MrsPorridge · 7 November 2012 at 7:39PM

Hi Andy,

I know how difficult this situation can be. I'm afraid to say that I think you can say "goodbye" to your £7K. In my view you have been more than fair and have actually bent over backwards to help your in-laws and there has been no appreciation or respect from them. It seems from your post that your wife agrees with you and feels the same way as you do. If that is indeed the case and as heartbreaking and harsh as this sounds I think you and your wife need to walk away now.

gossfam1 · 8 November 2012 at 12:44PM

Many thanks for you replies all.

JCG – Thank you for the suggestion of mortgage relief. They did look into this previously and I’m not sure what the outcome was, so I’ll push that again.

Just to be clear, I have no intention of lending them a penny more than the £7,000 we’ve already provided.

My wife initially wanted to give them some time to let them get back on their feet, but is now supportive of my more active approach.

Many of you think that my chances of them paying back the money is slim and you maybe right, however I’m not going to walk away yet and will keep talking with them as thankfully communications haven’t broken down just yet.

They live 200miles away, so face to face meeting are not easy and there is no chance of them living with us, thankfully.

I’m hoping that the emotional pressure of letting their daughter and grand-daughter down by preventing us from moving house with that money will stir them into action. I want them to admit they would rather cut all ties with their family than sell their bricks and mortar. If they do that, they I’d have no bad feeling in suing them for the money.

In their case, I know they have asset value in the house to afford the sum and there is no denial on their part that they owe us the money, it’s just they don’t want give it back just yet – but their heads are so stuck in the sand, when may never come without being pushed.

Paying back by instalments is an option, but at the rate bargain betty suggests it would take them 7-14 years; longer than they will be working for. I would only accept £200 - £300 a months to payback in 2-3 years. I know they could afford this by getting rid of mobile contracts, sky, unnecessarily car etc. As yet, I haven’t mentioned this option as I know this would also be a fight to get them to cutback and I view this as the riskier option for both them and us.

They just can’t see they would be better off in cheaper rented accommodation (without Blemain and the other mortgage round their necks) and with savings money in the bank.

If they continue down their current path, their house is likely to cost them dearly, including their own family!

Jaspersmum thank you for sharing your story. I did take a read of the leading money to friends and family thread that JCG mentioned and I’m amazing by the number of similar stories to mine. It is astonishing that people can behave this way, let alone those that you deem close to you.

Andy

bargainbetty · 8 November 2012 at 2:49PM

Andy, I suggested that amount because they cannot reasonably claim to not be able to afford it while telling you they don't need to sell the house to cover their debts. If they could afford to pay you £300 per month, or had the slightest intention of doing so, they might not be in this situation with their other debts.

Basically, if you ask for a smaller sum, you are more likely to get something, anything, towards the debt. Ask them to change their life for you, and you'll get !!!!!! all, and you know that from your comments about asking them to make cutbacks!

Bread now, or jam tomorrow?

Good luck.

Frustrating In-Laws

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