Feeling Bashed

Bobarella · 26 January 2015 at 9:31PM

Really sorry to read about this Cake. It must be very hard to take.

danandjens_worldtravels · 26 January 2015 at 10:41PM

I'd seriously question where he thinks he will have got 4% from??

Cash ISA's have been around or less than 2% for years.

http://www.moneysupermarket.com/savings/cash-isas/

This quick google search shows what savings rates have been since 1960.
http://swanlowpark.co.uk/savingsinterestannual.jsp

He's got his capital (early) and he's earning 4%. He should be glad he's getting whats been arranged as no savings account would allow him to have access to his capital and receive interest.

Maybe you understanding his position will take the pressure off you.

StressedSteph · 26 January 2015 at 11:28PM

Hi Cake

I totally agree with danandjens post on here. He would be very lucky to get 2% at the moment.

You have to think about how much you value his friendship?. Personally if I were in your shoes, I wouldn't particularly want contact with him after all of his nastiness anyway, so I would be tempted to tell him where to stick his interest.

Its only a verbal agreement, the capital is paid off early, he plucked a very hefty 4% out of nowhere and now he is getting abusive. I would tell him to sing for it!!!.

BUT.....If you do want to keep him in your life and you are a very forgiving person then i guess you are stuck and even though it is super annoying, if you can add the debt onto another credit card then i would be tempted to pay him off asap just to shut him up, although that IS exactly what he is trying to get you to do :mad:

Annoying and hind sight is a lovely thing. I must admit to never hearing family charging interest......Especially when it is decided after you have paid it all back :eek:

Let us know what you decided. Good luck xx

theoretica · 27 January 2015 at 12:38AM

cakeforbrains wrote: »

I mean the second one and, the more I think about it, the more I think you're right, if only to get him off our back. It's upsetting that one minute he can be happy with a rate, and the next he can arbitrarily demand that it quadruple, but until it's paid off we're always going to be subject to his whims.

The amount we owe itself is a whim, since it's a random rate he's come up with (4%) at the end of the loan based, supposedly, on what the money would have earned him had he left it in ISAs. The figure was literally landed on us last Saturday, years after we borrowed the money. Of course, the moral of the story is for both parties to agree terms at the start. (And as an aside, I think it's probably really unusual for a family member to expect interest at all on a loan, but hey ho).

I agree - a purely financial calculation is not the only way of deciding 'sensible'.

I hope with the interest calculations that the interest calculations at least take into account the repayments and decreasing amount owed rather than simply the initial sum borrowed and total time until capital was repaid.

Pixie5740 · 28 January 2015 at 12:32PM

I hope he is declaring the interest on the loan to HMRC as it is taxable income.

If he thinks people in debt are low I wonder what his opinion on tax evaders is...?

barbarawright · 28 January 2015 at 1:27PM

Isn't it illegal to charge interest on loans unless you have the correct licence?

yamsteroo · 28 January 2015 at 1:49PM

As it seems he has decided to break all contact except demanding text messages, you don't really have a lot to lose by playing him at his own game.

As mentioned, if he is charging interest then technically that is classed as an income and he will have to declare it on his tax return. I'm assuming as he has demanded the interest at £200pm that the initial loan and therefore the interest was a sizeable amount? Ask him if he has any intention of declaring it.

Secondly, he has had his money back within the time period required. Is there anything in writing to say interest would ever be paid at the start of the arrangement? If not, I don't believe he would be able to take it further with regard to recovering this retrospective interest demand.

Tell him he's had enough and leave it to him to try and enforce it - I doubt he can.

It sounds like he's not entirely happy in his life but that is no reason to take it out on your or your family.

Lottie_Clark · 28 January 2015 at 2:26PM

cakeforbrains wrote: »

We don't have to see him, but generally we have a good relationship with him and he comes round to socialise with us. In fact, last weekend he was here and we all had a brilliant time.

He's always been very up and down with his attitude to the money we owe him. Sometimes, when he is here, he can be very generous saying things like 'take all the time you need to get your family sorted' and then, periodically, we get these abusive and demanding texts or calls.

He has a girlfriend who, although doesn't live with him or share finances with him, has always been on his back to get the money from us. He originally leant us the money before they met and she has never been happy with it. He told us once (back when we still owed him capital) that she threatened him that their relationship wouldn't progress (to cohabitation and children) unless he enforced these £500 per month. So he did. Their relationship hasn't progressed. By his account she can be very controlling and verbally abusive to him. We've spent years gently being his shoulder to cry on about it all but, as I say, he flip flops in his attitude about the money we owe and to what extent we're terrible people for being in debt.

I'm flip-flopping now too; I'm now tempted to pull all the interest we 'owe' him out of my bum in one go just to end all this. I can't afford it, though, so it will essentially add to the credit card debt.

Hey Cake,

Firstly big hugs to you and your family because owing money is pants and (as you'll see from my sig) owing money to family members/loved ones can often feel worse than owing it to 'faceless corporations and banks'. I know, for me, the guilt factor is always massively high - judgements and emotions always play a part, and maintaining a relationship separate to the financial situation with them is difficult.

I think you deciding what works for your peace of mind is brilliant - and if that is paying the (made up) 4% interest in a lump sum then so be it. Although I agree with a lot of the advice given here (not sure he can charge interest, he wouldn't get 4% from a current ISA...) to undertake any of these tactics, even though you'd be in the right, would be a fight for you - a completely justified one - but a struggle none-the-less, and when you're already bashed down that can be hard to enter into.

All I would comment on - and why I've quoted your segment above - is there may be some elements here out of your control that could end up affecting you and how this progresses. Obviously the current girlfriend is a huge influence on your relative, and it sounds (forgive me if this isn't the case) like she doesn't visit with him when he comes over to you so maybe you don't have a (successful) relationship with her?
Now there isn't much you can do about that - you can't dictate who he has a relationship with (and he wouldn't accept your advice anyway) and you can't remove her influence over him but it may be worth talking to him about it anyway - my concern here is that if you hand over this '4% interest' payment in one lump sum there's no saying he/she couldn't demand more - if they plucked the initial figure out of the sky what's to say they couldn't suddenly demand 'compensation' or 'late payment fees'?! The harassment may not stop just because you 'clear' this bonkers amount.

Also, if you feel your relative himself may be abused (emotionally, physically, financially) he, and you as a branch of support for him, will need professional help to cope with this. It will be way too much for you to take on so please research the correct channels.

Another thing to consider is the possibility of an underlying mental health issue. Erratic behaviour, 'flip-flopping' between acceptance and harassment, they could be symptoms of something else going on. And, again, your paying the 4% won't solve these or guarantee his behaviour towards you changes.

I know this is a lot to think about (and READ - sorry forumites!) but I'm concerned you'll bust a gut getting this money to him, hoping it'll get him off your backs and you can reform your relationship with him, only for a new problem - potentially still financial - to arise from him.

It doesn't alleviate the stress and anxiety between all of you at the moment - but I'm not entirely convinced a 'one-off payment' will either.

Sorry Cake - hope it genuinely works out for all of you involved.

L. xx

Lottie_Clark · 28 January 2015 at 2:31PM

Oh and bloomin' well done for all those steps you've taken since Nov 2013 and cranking down on all your debts since then - that takes guts and determination and you and the hubby should be proud of what you've achieved!

L. xx

KittyKate · 28 January 2015 at 4:10PM

Gosh, a family member deciding on a hefty 4% interest AFTER you've repaid the loan! (Am shocked he didn't charge you an early settlement fee!)

There is NO way he can ever enforce this, and if it's getting to the point where he's even refusing to talk to you I'd stop payments altogether and if you are wanting (from a moral perspective) to pay back some interest as a thanks to him, get something signed (and based on real figures, 2% is far more realistic) otherwise he could decide he said 6% a month before your last payment!

If he doesn't get his Feb payment then he will HAVE to call you and sort it out.

As for his friendship, I don't know the ins and outs but it certainly doesn't sound like he is in need or even out of pocket at this point, and for him to harrass you and belittle you and try to enforce unrealstic payments on you when you have three children and are trying your best to get out of debt to the point you sold your house then I think he's out of line - not you. Do you even need someone like that in your life?!

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