Lending money to family member

JasX

spend_or_save wrote: »

You obviously have your opinion that no one should ever lend anyone any money, thats fine, bit strange to me but entilted to your opinion.

umm no I'm mostly jumping on your outrageously absurd logic that when a family member is defaulting on a loan, is *completely unable* to meet their agreed payments and the usual strife between creditor being resentful they are out of pocket and debtor resentful family member X now represents the millstone of the loan at every family occasion.

In that situation all possible fallout is generally because the contract wasn't detailed enough and can easily be avoided by having a detailed contract.

Frankly you seem completely in cloud cuckoo land with that logic and I'm not surprised others are jumping on your flawed thinking too.

Any watertight & detailed or flimsey/verbal contract would lead to EXACTLY the same outcome, family fallout and strife when it *cannot* be paid back and is broken by the family member

you are about as wrong as it's possible to be with your obviously flawed advice

Murphybear

My mother lent my brother a small sum of money (£1200 25/30 years ago). It was legally drawn up and she did not want it back in her lifetime, his share of money left in her will was adjusted accordingly. This worked well but I would agree with the others that lending money to family is not generally a good idea

JasX

Murphybear wrote: »

his share of money left in her will was adjusted accordingly.

That's an interesting way to do it, you probably ought to factor in inflation / time value of money into anything like that to avoid other beneficiaries losing out

spend_or_save

Trek_girl wrote: »

If someone came on here saying they wanted to jump off the roof of their house into a paddling pool and wanted to know what kind of paddling pool to use, we would all say 'don't jump!'. We have seen people do it on TV- dive into a pool and walk away without a scratch, but common sense and perhaps past experience says it will end in tears.

You are advising on what kind of paddling pool (contract) he should use.

You are now comparing giving a family member a loan to jumping off a roof..... ??! no debating with someone with that logic

PS if you want some paddling pool reccomendations would be only to happy to help:rotfl:

Pollycat

spend_or_save wrote: »

You are now comparing giving a family member a loan to jumping off a roof..... ??! no debating with someone with that logic

PS if you want some paddling pool reccomendations would be only to happy to help:rotfl:

I thought Trek_girl's comparison was pretty good.

spend_or_save

JasX wrote: »

umm no I'm mostly jumping on your outrageously absurd logic that when a family member is defaulting on a loan, is *completely unable* to meet their agreed payments and the usual strife between creditor being resentful they are out of pocket and debtor resentful family member X now represents the millstone of the loan at every family occasion.

In that situation all possible fallout is generally because the contract wasn't detailed enough and can easily be avoided by having a detailed contract.

Frankly you seem completely in cloud cuckoo land with that logic and I'm not surprised others are jumping on your flawed thinking too.

Any watertight & detailed or flimsey/verbal contract would lead to EXACTLY the same outcome, family fallout and strife when it *cannot* be paid back and is broken by the family member

you are about as wrong as it's possible to be with your obviously flawed advice

umm .. your totally missing the point, and people aren't wrong just because you decide they are.

My point has been, and is, that if the contract is more detailed it can reduce the chances of disagreements and not getting your money back.

Im struggling to see why you are so offended by this?

I havent once said it gaurantees you will get your money, or that it will stop some selfish idiot not paying it back, purely that if its done correctly it can help.

For example, if someone is borrowing £10k with no interest to be paid back in 36 monthly payments of £278 and that is all that is agreed, if they lose their job and no longer have the means to fund the repayments that could lead to resentment, arguments, and loss of money for the person giving the loan.

If the contract added a provision for what happens when the person loses their job (i.e they can have a 6 month payment break, the car is to be sold, reduced payments of £50 per month, etc whatever is agreed) then both parties would know exactly where they stand and what has been agreed, which would surely minimise any resentment or arguments about what should happen as its already agreed.

Could the person who took the loan, still decide they dont care and they are not interested in paying their family member back? of course they could, but i have never said they couldn't, im pretty sure the OP has never thought that either.

Guest101

spend_or_save wrote: »

umm .. your totally missing the point, and people aren't wrong just because you decide they are. - No but you are wrong based upon:

My point has been, and is, that if the contract is more detailed it can reduce the chances of disagreements and not getting your money back. - Actually the more detailed the contract, the easier it is to get wrong. A simple A owes B £X, repayable at £Y per month for Z months is much better than a complicated and poorly structured home made contract.

Im struggling to see why you are so offended by this? - Small claims action doesn't require a lot of proof, but what it cant do is A: fix relationships or B: get blood out of a stone.

I havent once said it gaurantees you will get your money, or that it will stop some selfish idiot not paying it back, purely that if its done correctly it can help. - Like I said, a contract is very simple in 99.9% of cases like this.

For example, if someone is borrowing £10k with no interest to be paid back in 36 monthly payments of £278 and that is all that is agreed, if they lose their job and no longer have the means to fund the repayments that could lead to resentment, arguments, and loss of money for the person giving the loan. - That's where communication comes into it, not clause 1.3b subsection 57

If the contract added a provision for what happens when the person loses their job (i.e they can have a 6 month payment break, the car is to be sold, reduced payments of £50 per month, etc whatever is agreed) then both parties would know exactly where they stand and what has been agreed, which would surely minimise any resentment or arguments about what should happen as its already agreed. - Long term illness, bereavement, injury, mental health problems, loss of asset, relationship breakdown - do you intend on listing every single one?

Could the person who took the loan, still decide they dont care and they are not interested in paying their family member back? of course they could, but i have never said they couldn't, im pretty sure the OP has never thought that either.

K.I.S.S - Keep It Simple Stupid. A motto to learn from (certainly helped me)

spend_or_save

Guest 101,

"For example, if someone is borrowing £10k with no interest to be paid back in 36 monthly payments of £278 and that is all that is agreed, if they lose their job and no longer have the means to fund the repayments that could lead to resentment, arguments, and loss of money for the person giving the loan. - That's where communication comes into it, not clause 1.3b subsection 57"

I dont know how you can argue, im guessing your argument is that you shouldnt give a loan out, that giving a loan leads to arguments and relationship breakdown's, then say dont detail out what happens when certain situations arise, just talk about it and it will be ok. Seems totally Contradictory.

You say it keep it simple is best, but what you are doing in a situation like this is making it vague and open to disagreement and conflict.

Tell me how, having it set out in the contract what happens for non payment through a job lose, illness etc would lead to the likelyhood of more disagreements and fall out than would happen if nothing was mentioned in the contract?

Guest101

spend_or_save wrote: »

Guest 101,

"For example, if someone is borrowing £10k with no interest to be paid back in 36 monthly payments of £278 and that is all that is agreed, if they lose their job and no longer have the means to fund the repayments that could lead to resentment, arguments, and loss of money for the person giving the loan. - That's where communication comes into it, not clause 1.3b subsection 57"

I dont know how you can argue, im guessing your argument is that you shouldnt give a loan out - I didn't say that?, that giving a loan leads to arguments and relationship breakdown's - It does, but I didn't say that prior to this either?, then say dont detail out what happens when certain situations arise, just talk about it and it will be ok. - If I lend someone money, it will be to someone I can talk to, not someone I need to wave a bit of paper around. If i don't feel able to talk to them in difficult situation, i wont lend them the money. It's that simple. Seems totally Contradictory. - It's not, but you are misinterpreting what I'm saying.

You say it keep it simple is best, but what you are doing in a situation like this is making it vague and open to disagreement and conflict. - No, I'm using my judgement on my relationship with (not to) the person.

Tell me how, having it set out in the contract what happens for non payment through a job lose, illness etc would lead to the likelyhood of more disagreements and fall out than would happen if nothing was mentioned in the contract?

Nothing to do with fall out, you are not qualified to write a complex contract. You will get it wrong. And if you require such a contract, it's likely you will need to go to court to get your money back.


The more detail there is, the more of a defence the person to provide to not paying the money (and ultimately winning in court).


For example.


Bob, who's borrowed money from Bill, has an accident at work, this leads to long term sick leave, eventually Bob returned to work, but suffered mental health problems due to the accident, eventually Bob retires.


Which of your clauses cover which period in Bob life?! Does the Job loss clause only come into effect after the 12 months off sick? Or does Bobs limited return to work mean that he now has to pay, even though he's not capable of carrying on? or?

spend_or_save

Guest101 wrote: »

Nothing to do with fall out might not be for you, but 90% of the comments have been "dont do it because you will argue and fall out", you are not qualified to write a complex contract - i am actually, but take your point that alot of people are not, however i have never said complex, i said detailed. You will get it wrong - . And if you require such a contract, it's likely you will need to go to court to get your money back. - have never said otherwise, my point has basically been, people fall out because of their expectations of what should happen in certain instances, if these are agreed before hand it reduces the risk of fallout


The more detail there is, the more of a defence the person to provide to not paying the money (and ultimately winning in court).


For example.


Bob, who's borrowed money from Bill, has an accident at work, this leads to long term sick leave, eventually Bob returned to work, but suffered mental health problems due to the accident, eventually Bob retires.


Which of your clauses cover which period in Bob life?! Does the Job loss clause only come into effect after the 12 months off sick? Or does Bobs limited return to work mean that he now has to pay, even though he's not capable of carrying on? or? - its not difficult, it would be whatever was agreed with bob and bill, again you seem to be contradicting yourself, you say keep it simple, but then ask what would happen in this circumstance, if its not defined in the contract it leads to disagreement, if it is stated what happens in job loss, sickness, etc situations then theres no disputing what should happen, as i said before i am not saying it will gaurantee it, but thats never been the argument

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