Money Moral Dilemma: Should I lend £20,000 to my in-debt in-laws and risk not getting it back?

MSE_Kelvin · 20 January at 1:15PM

This week's MoneySaver who wants advice asks...

My in-laws have a mountain of debt in mortgages on three properties. My father-in-law quit his well-paid job after burning out, the bills piled up and now they’re skint. I've inherited some money, and my wife wants me to lend her parents £20,000 to see them through selling their house. But we were going to use that money to buy our own home - we live in one of their properties and have been covering the mortgage there. And as they don’t expect to make a profit on the sale of their home, it wouldn't be so much a loan as a grant. Am I wrong for thinking we shouldn’t bankroll them given their poor financial and life decisions?

Unfortunately the MSE team can't answer Money Moral Dilemma questions as contributions are emailed in or suggested in person. They are intended to be a point of debate and discussed at face value. Remember that behind each dilemma there is a real person so, as the forum rules say, please keep it kind and keep it clean.

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Exodi · 20 January at 1:22PM

I wouldn't.

Never mix money and family, especially where one just quits their job without a backup plan.

That said, do you pay rent on the house you live in? I'd be a bit conflicted if you were living rent free in one of their properties while they're being crippled by the mortgage.

EDIT: no idea why I'm asking questions to a MMD.

elsien · 20 January at 1:26PM

Only lend money you can afford to lose - there is a fair chance you won’t get it back so effectively it’s a gift. Can you afford to gift that amount? What does your wife think about bailing them out if they don’t repay and it impacts on your options as a couple?

Send them over to the debt free wannabee part of the forum in here instead and they can get proper advice directly. Fairly sure that advice will not be borrow another 20 K off someone.

Emmia · 20 January at 1:28PM

MSE_Kelvin said:

This week's MoneySaver who wants advice asks...

My in-laws have a mountain of debt in mortgages on three properties. My father-in-law quit his well-paid job after burning out, the bills piled up and now they’re skint. I've inherited some money, and my wife wants me to lend her parents £20,000 to see them through selling their house. But we were going to use that money to buy our own home - we live in one of their properties and have been covering the mortgage there. And as they don’t expect to make a profit on the sale of their home, it wouldn't be so much a loan as a grant. Am I wrong for thinking we shouldn’t bankroll them given their poor financial and life decisions?
Unfortunately the MSE team can't answer Money Moral Dilemma questions as contributions are emailed in or suggested in person. They are intended to be a point of debate and discussed at face value. Remember that behind each dilemma there is a real person so, as the forum rules say, please keep it kind and keep it clean.

If you haven’t already, join the forum to reply.
Got a Money Moral Dilemma of your own? Suggest an MMD.
View past Money Moral Dilemmas.

No. Do not lend them the money.

Gift them the money if you like with no repayment or other strings, if you genuinely intend that.

If they're skint they have properties they can sell.

Pollycat · 20 January at 1:30PM

If you can afford to write £20k off in the event they don't pay you back, go ahead and lend them the money.

MattMattMattUK · 20 January at 2:01PM

Absolutely not, unless you want to end up losing it, hating them and it destroying any relationship with them.

sheramber · 20 January at 3:08PM

Exodi said:

I wouldn't.

Never mix money and family, especially where one just quits their job without a backup plan.

That said, do you pay rent on the house you live in? I'd be a bit conflicted if you were living rent free in one of their properties while they're being crippled by the mortgage.

EDIT: no idea why I'm asking questions to a MMD.

we live in one of their properties and have been covering the mortgage there

Exodi · 20 January at 4:11PM

sheramber said:

Exodi said:

I wouldn't.

Never mix money and family, especially where one just quits their job without a backup plan.

That said, do you pay rent on the house you live in? I'd be a bit conflicted if you were living rent free in one of their properties while they're being crippled by the mortgage.

EDIT: no idea why I'm asking questions to a MMD.

we live in one of their properties and have been covering the mortgage there

I definitely need to add 'learning to read' to my to-do list!

In that case, no confliction here!

roubiliac · 20 January at 7:49PM

I wouldn’t. They need to adjust their lifestyle to suit their means now he has no job. They can do this by selling one or more of their extra properties.