Family Member owing money

GrannyW100

Hi there.

Apologies if this is in the wrong area.

My husband, a year ago last Christmas ish time, took out a loan on behalf of his niece who was in rent arrears. He paid the money into the landlady's account direct (well she said she was the landlady but hindsight is a wonderful thing). The niece has since lost her job, lost the house and moved in with her partner's sister together with their 3 children. She is depressed and will not answer the phone and has never paid any of the money back. Now I do realize that my husband is responsible for the debt as it is in his name - I'm not disputing that at all and it was daft of him to do so but there you go. We have since learned that she has borrowed 4k from my husband's daughter (who is not good financially and I've no idea how she managed to get such a loan) and 2k off of her grandmother - combined with the money owed to my husband that amounts to around 9k in total. I am sorry that she is depressed but both her and her partner should not be allowed to just ignore their debts (though they are doing a good job of it). I know, if taken to small claims court, then it's likely that only a bare minimum of the load may be repaid, if any, but it is the principle of the matter - any advice would be welcome . thanks

Sea_Shell

At least he took out the loan himself, hopefully at reasonable rates, rather than being her guarantor on a sub prime rate.

Not sure there's much more he can do, if she has no money she has no money. You can't get blood out of a stone, unfortunately.

Doozergirl

There's an old saying - you can't get blood from a stone.

Your husband can go to the small claims court and get an order and yes, it will have to be arranged that they pay anything back in small chunks, because the niece clearly has no means of paying it back. But that is all you can do based on the principle of it. It sounds like the situation is desperate and anything they pay back is going to be a struggle financially if they are at rock bottom.

I have been in a similar situation, and the only thing you can take away from it is not to do it again. Hindsight is perfect - it wasn't a great idea to take on debt to support someone who couldn't take on debt in their own name. You do these things out of love though. What you need to hang on to is the love, because the money won't come back any quicker when love is lost.

Love is something that needs considering when trying to decide on whether to travel the small claims route.

Martin talks a lot about the link between mental health and debt. Here's another example. Responsibility is something taken by someone capable of taking it. Her life sounds pretty dire right now.

GrannyW100

Thanks.

I think I already knew the answer - he spoke to me before taking out the loan (and it wasn't with a dodgy type loan company like Wonga etc) and I did say, what if she defaults. I think he feels bad because I basically told him not to do it but he's too kind hearted. I think I feel less as she's not a blood relative of mine and I really just want some form of justice in this case. It's not us so much I worry about as his daughter - I'm pretty sure she took out an IVA to consolidate the money she owes (I've already fought one case of eviction for her and, well I don't really want to do another) and I think she's in real difficulty - she's talking about cancelling IVA which could lead to bankruptcy obviously). It just bugs me so much that she and her partner (or maybe he's that controlling it's all him...) could do this to not only 1 member of their family but to 3 members.

Thanks again.

sourcrates

Hi,


If she owes family 9 grand, then its very likley she also owes twice that in consumer credit debts as well, you would be best off just writing this one off to experiance to be honest, if she has a current IVA, then she is protected from creditors legal action, even if the debt to your husband is not included in the IVA, it can be added under certain circumstances.


That aside, its clear she has no money, and you say the IVA is likley to fail, bankrupcy is not an automatic option, it would be of no benefit for creditors to make an insolvent, bankrupt, as there is no financial benefit in doing that.


The legal system for debt recovery only works if the person has money and/or is working, or has assets, otherwise its just another useless tool.

ev8

I don't really know, I've always stuck to the mentality of never lend more than you can afford to lose yourself.
If you lend money, pretty much you can wave that money goodbye, so unless you can really afford it, don't lend it. I even apply it to my possessions, if I lend something, it's only something I don't mind never seeing again, anything else, it's a no.
Perhaps it's come from me being an only child?

I don't really know what the thinking was of going into debt for a niece who was already clearly in debt, and his daughter lending 4K, this is a lot of money you've all sent her way.


I think there's the lesson there though, don't lend what you can't afford to lose.

HampshireH

It just bugs me so much that she and her partner (or maybe he's that controlling it's all him...) could do this to not only 1 member of their family but to 3 members.!

Not just her. They were all willing participants to get into debt for her.

Perhaps a good talking to is required by all those affected and in 1 room together so they understand the devestating impact its had on you all.

Explain to her that this is it. You won't be supporting her financially any more and nor will your step daughter.

But like i said........everyone agreed which makes them equally if not more responsible. It has enabled her behaviour.

JayRitchie

HampshireH wrote: »

But like i said........everyone agreed which makes them equally if not more responsible. It has enabled her behaviour.

This. It would be hard to find a circumstance when it is wise to borrow money to lend to someone in tough circumstances, and you have not helped her in the slightest. You've pushed more debt on a vulnerable person, damaged her relationships with family and risked your own well being. I'd consider any such loan to be a gift until proven otherwise.

GrannyW100

thanks.. it's my husband's daughter that has the IVA not his niece. I think what I'm feeling is moral injustice - I wouldn't do this to any member of my family and I hate (and yes, that's the correct word) that someone in his family has taken advantage of other people's kind natures. I know I have to let it go - it's not doing me any good mentally either and has caused a few arguments between me and my husband.

GrannyW100

Just to clarify. Neither of the 3 parties that lent her money knew that the others had done the same - it's only now that this has come to light. It may seem that I'm being hard on her (to be honest I don't really know her and have only probably met her 3 times and never really held a conversation with her on those occasions). I did advise not to lend her money. Yes, probably she is vulnerable - but it seems unfair to the 3 parties that have lent her money for whatever reason that they should be the ones that end up paying for her (and her partner's) lies... as I said, it's the injustice that someone can just get away with something that really annoys me. thanks for all your comments though - I will take them on board and not lend anyone money in the future that I can't afford to lose (not that I did - I've learned that the hard way too).

ev8

GrannyW100 wrote: »

thanks.. it's my husband's daughter that has the IVA not his niece. I think what I'm feeling is moral injustice - I wouldn't do this to any member of my family and I hate (and yes, that's the correct word) that someone in his family has taken advantage of other people's kind natures. I know I have to let it go - it's not doing me any good mentally either and has caused a few arguments between me and my husband.

But what can she do if she literally has no money and not even a home?

Nobody forced anyone's hand in getting debt for you in order to give this woman even more debt.

I don't think she's really done anything wrong, if you really weren't in a position to lend this money, when asked the answer is no, I'm sorry, I can help you in other ways but I have no money to spare.

Moral injustice? But you yourself saw this coming, you told him not to. To me, it's a bigger problem that you told him no and he got you both into debt anyway.