Among Friends

[pdlinda]

My daughter called me this morning regarding a loan she made to a  21y.o. niece on her husband's side of the family.

The loan was made in late September for $1,250.  It was requested for a 2 wk period so the niece could provide a security deposit on an apt. that she wanted to rent in a sought-after part of the City where she's going to school.

The niece is a student who also works.  She can pay her rent from her salary but doesn't have any "reserve" cash.

She asked her parents for the $1,250 and they said they didn't have the $$ on such short notice but would have it in 2 wks. She knew she would lose the apt if she waited so that's when she called my daughter, who is a working professional.

My daughter discussed this with her husband and he had no opinion about the matter. 

On the due date for the loan, the parents transferred $250 to my daughter''s acct. She asked when the balance would be paid and she started getting "vague answers" from the niece's parents.

She followed up with the parents and continued getting the "runaround" from them.  Eventually, her father said he would repay my daughter in $200 increments, one payment a week.  The first $200 was sent 2 wks ago with no follow-up payment last week.

My Son-in-law's family is very close.  They get together often with the grandparents on that side and the cousins see each other frequently.  

Creating a rift by pressing the loan situation would have consequences among my daughter's kids and their aunt, uncle, their kids and the grandparents.

My daughter cannot afford to "absorb" what is now an $800 loss.  

I don't know what to advise her to do.  Any suggestions? Thanks!

[haddon9]

If I were your daughter, I woulld ask the neice for the money.  After all, she was the one who asked to begin with.  You said that she works and can pay back but didn't have the funds at the time.

Keep asking and never lend to these people again....ever!

[Kachina624]

@pdlinda.  You daughter learned an important lesson, don't loan money to relatives.  When mine asked to borrow a rather modest amount, I told them I would not do a loan but I'd send them what I could afford and didn't want payments but never ask me again.  It worked out well as I knew they could not repay me and I got rid of future requests.

Only you daughter and sil can decide how important these people are to them.  If it was me, I'd continue to press for repayment.

Did she get the agreement in writing?  If not, mistake #2.  If nothing else, it let's the borrower know it's a serious commitment. 

[chrystaltree]

Your daughter is an adult so you should stay out of this entirely.  This is about HER in-laws and a poor decision on her part.  You only loan people money if it's a dire emergency and YOU will be ok if you don't get it back.  That niece's situation was not an emergency.  That the niece and her parents didn't have $1250 between them was PROOF that there's no way they'd be able to repay your daughter in one lump sum.  It was never going to happen.  It seems like she loaned the money to the niece, not the parents.  They are under no obligation to pay their adult daughter's debt.  Yes.  It's a no win situation for your daughter.  Her husband stayed out of it because he knew exactly where it was going.  Your daught should renegotiate the loan with the niece.  Make it long term.   Let the niece pay the balance off at $25 a week.  Your daughter should stop asking the parents for the money and stop talking about it with anyone else in that family.  

[icezeus]

My aunt used to say not to loan money that you cannot afford to lose. 

Years ago, a coworker asked to borrow money from me. It was not a large amount, but like @Kachina624 , I told her not to make me ask for my money and that I would not do it again. She did pay me back on the next payday, but I was able to end any future requests.

[Tori3569]

I'm in the same camp as @Kachina624 .  I've been asked for loans from my 2 nephews and also a close friend in the past. I gave them each what I could afford without the expectation they would repay me.

 I was unable to lend them the full amount requested, but was happy to help out.  All three are in a much better place these years later and never needed to ask again nor would they.  I am glad I could help.  

[GingerHead]

 Sorry, but now your daughter will be considered the bad guy because people are horrible (some).  

 I learned the hard way to never loan money to family or friends because when they don't pay you back and you ask for repayment like they promised, you become the bad guy and are hated for it.

We loaned $ to my brother 15 years ago and we no longer have a relationship for that and many other reasons (money and politics.... no win situations)......

[pdlinda]

@Kachina624  No, there was no written agreement.  The thought of the parents not being able to be trusted to return the $$ for their daughter never crossed my daughter's mind....but I admit...this was a very valuable life lesson.

[pdlinda]

@chrystaltree   I agree with you.  It never occurred to my daughter that the parents wouldn't be able to come up with that amt of $$, but that's because there was never any financial contact between them.  Now she understands that the sister and bro-in-law are not reputable, and, although she will continue to have contact with them at family functions, her affection for them has been destroyed.

[Carmie]

If push comes to shove and there is some sort of proof that money was borrowed....e-mail, text, or a check you can always visit your local district justice.

They can settle anything for $5000 or less.  No attorney is needed.  I had to do this once.

My father used to rent apartments and he would have to do this to get rent payments from deadbeats.

Sometimes just the threat of going to court over a matter will produce a solution to work this out.