Bailing relatives out of an underwater home

So who's going to loan you money if you need it? No one. If you don't let them fail, they'll never learn. So sorry, so sad. Don't loan them the money.

Do you want
a pig in a poke?

Lend the money
you gutless bloke

Watch it fly
Fly away FAR

As she sticks her hand
in YOUR cookie jar

She's family, 'tis true
my, that's a bust

for she's not the one
Not the one you must trust

when you hand it over
Will she stay true?

Or shout like the band
HA HA "frack," YOU!!!!

I think my view is evident. Don't give these losers a dime. Subsidizing weakness is an ObamaNation. Don't make his mistakes and be a coward as well.

Loan the money if you can afford to do without it…. but don't loan it if you cannot afford to …. ie next month you need it for a car repair, college tuition, etc.
When I've been unable to afford to lend money to a friend, I make it a point to invite them over to dinner frequently. It costs me very little to prepare food (especially with whole chickens at 87 cents a pound…ideal for the roaster), but it helps my friend reduce his food bill.

I can make 8 meals out of 7 dollars worth of roast chicken (self prepared)
Add a little pasts, rice, potatos, or, whole wheat bread ((at a day old discounted price of 67 cents a loaf), vegetables and fruit, and I can eat a full healthy meal for under two dollars.

I was forced to lend $10,000 to my brother for his new business. My mom threatened to end our relationship If I did not. I do not expect to ever see that money again. I have some savings and I make over $100k a year, but I am a single mother with 2 kids. This is money that I could use for my own kids. Just a little resentful…

To say "never lend money to a relatives" is too big of a generalization. It all depends on who your relatives are. I've loaned money to my brother and three sisters for their house and car down payments. I've received all of the money back. They paid the money back in varying schedule depending on their ability. I feel good about being able to help out my siblings to buy their homes and cars. I guess you can say my default rate is ZERO

Some of my other relatives however, I wouldn't lend a dime to. So summing up, it all depends. You need to know who you're dealing with. And of course, with friends and relatives, you have to be prepare to forgive the loans if there are problems.

With home values falling further, it's doubtful they will ever accrue any equity in their home. Let them take in a renter or exchange student and sell off furniture on Craigslist. It's doubtful they've taken any other drastic cost-cutting measures like that. Offer to arrange to have them speak with a financial adviser.
You'll always feel the burn when you see them indulging in some luxury no matter how big or small. I lent money to a friend which supposedly went to keep the water on. Said friend then went on to marry in a luxurious mountain retreat, then take a series of vacations to Europe. I somehow became the villain for asking for my money back and I've yet to see it.
Neither a lender nor a borrower be.

This hit close to home, and reminded me of my situation when the economy was better. I helped educate my nephew so he could support my sister's family when they immigrated to the US. The nephew graduated, and got a full time Engineering job just in time before my sister's family immigrated, (and they all came to stay with us, as I wanted to help my sister's family as much as I could).
After several weeks, my niece (also an Engineer) lands a full time job! (The nephew is already working at a full time Engineering job.) Then through contacts, we helped my sister land a job as well. So after a couple of months, I suggested they find their own place, since they were well on their way to financial security.
Boy! Was I mistaken!! The crying game began! I was labeled the worst brother ever, since I was throwing my poor sister and her family with two kids (both college educated mind you) out on the streets. The crying got to my mother who blamed me for my sister's misery, and wondered how I could be so cruel. Even my 2nd sister (forgetting how much I had already helped one sister) took her side initially until she finally saw through her drama.
Today, thanks to my sister, I would think twice before helping a relative.
The one lesson I would pass on is that if you can help a relative without adversely hurting yourself, do so. When you stop helping, be prepared to be labeled the bad guy. And when you receive help, pass it on when the tide turns for the better.

Do not loan money to family, ever. If you want to help your family, give them the money.

There is an old saying that goes, "If you lend somebody money and never see them again, it was probably worth it."

You must ensure that they always have a roof over their heads, and food.
You could offer things that you are willing to give…. not necessarily what they are asking for.
Then, they can accept or decline what you offer. (Examples might include offering to have them move into your home, or half of the rent for 3 months in an apartment, etc)
You cannot be sure you will ever get back the $10,000 loan, especially because he is unemployed. (You did not say if your sister was employed.) Have they BOTH filled out applications for less impressive, and lower paying jobs?

Very true. the key of loan among good friends and family members are:

1. small amount payback over long term for bigger loan.
2. Preset a pay back schedule
3. Along the pay back period, kick in some breaks.
4. The best way would be post dated personal checks.

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I’m shocked by how many people can’t trust their own family members to pay back a loan to them. My dad has borrowed money from his parents and always paid them back. It might have taken awhile with small payments, but he did it. He looked at it as changing lenders. Instead of paying the one lender who demands high payments and interest, he paid the other who would take what he can afford with little or no interest. No strained relationships, no hard feelings. But it depends on the situation. I hope that the sister and brother-in-law learn from their mistakes and get back on their feet.

A better way would be to advise your sister-in-law to return the luxury car to the bank instead of paying for her the high monthly payment because that implies you are paying the "profit" of car loan company.

Once the car with car loan default, they can return the car, and at the same time, you can loan them to buy a much cheaper used car, or even better, give them you car, and you buy a new car.

That way, your psychology will be better while helping them.

But, if you loan, you want to have post dated checks in hand, say, a few $100 check each month, or 60 $100 checks for 60 months, each paid each month.

Close friends or relatives tend to think "loan" is "gift" if there is no "formal" procedure. And, in Taiwan, post dated checks seemed to work very well.

Also a test would be "ask the person going to loan with if they have their checks bounced before".

People with check bounced history often will NOT honor their personal checks. keep this in mind.

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I loaned my sister-in-law money to pay her car loan that had gone into default. She could barely afford to pay me back in monthly installments, and I had to ask her every month if she’s able to pay. What infuriates me is seeing her and her family buy designer clothes and small luxury items (videogame consoles, ipods, cellphones) before paying me back. And to think that she drives a nicer car than I do. This is going to be the last time I will give a loan to anyone!

I'm shocked by how many people can't trust their own family members to pay back a loan to them. My dad has borrowed money from his parents and always paid them back. It might have taken awhile with small payments, but he did it. He looked at it as changing lenders. Instead of paying the one lender who demands high payments and interest, he paid the other who would take what he can afford with little or no interest. No strained relationships, no hard feelings. But it depends on the situation. I hope that the sister and brother-in-law learn from their mistakes and get back on their feet.

You seemed to have a good soul, but keep in mind, when you are baby, kid, student, you mom charge you nothing to raise you.

In Sociology course of Rutgers University, the professor asked a question to hundreds of students in Beck Hall auditorium.

The question is "what is a mother?" No one answer, so I started yelling out "the person pay your college tuition".

The professor did not seem to satisfy, so I yelled more "the person who wash your clothes, the person who cook for you free, the person who pay mortgage of a house and let you have a room free for many many years …etc"

Then, the professor seemed to not able to find a "substitue" role of mother.

The way to help your mom would be very easy to think. Just think about how your mom help you when you are little. But, you have to wait till your mom "grow little". i.e. a person often "grow older", but old people will "grow little or younger". When they become like "your daughter", you can take her to your home for longer.

The longer the younger she becomes. When she is still young with "boy friend", it may not work.

I helped a homeless couple in Maden Ln near Wall St. I visited the daughter of the lady at Hazleton PA and found the daughter got nice 3br townhouse with nice furniture (rent there is cheap, only about $400).

I could not understand why she let her mom panhandling in NYC. She said she would let her mom to move in her nice home, but she would NOT let her mom's husband (not father of daughter) move in, only visit a weekend the most.

So, the episode starts like that when the couple panhadling on street and eventually daughter miss the mom and heard no news of mom, she would have to drive all the way to Wall st to find mom and pick up mom home, but mom will not go without taking the husband (so similar to young girl will run away with boy friends…)

Then the daughter took the couple home, and after a few days, the daughter could not tolerate the husband and ask him out, so he would come back to NYC panhandling with some support of the wife.

Soon or later, the wife would miss the husband so much and decided to leave the daughter and come to join husband in NYC.

So, I asked the daughter to find a "furnished room" at Hazleton PA for about $170 a month, and helped the couple moved off NYC street.

They all had SSI, but $600 or so a month, as you can guess, not enough to live in NYC where I paid $50 a day for them stay at hotel at Staten Island, but at Hazleton PA, it is so affordable.

They did not have bank account, but that's ok. I told them to endorse their SSI check to landlord each month, and the landlord return them cash exchange.

As you can guess, Mayor Bloomberg would spend $33,000 a year to help a homeless families eventually move off street, but, if he knows Homeless Solutions I compliled. It costs much less.

One manager working at Maden Ln told me they have been there for 17 years, panhandling, even years before he started working in a company there. I told the manager, they will NEVER come back.

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First off I feel your pain. My mom is in the same fix, but not at that level. I plan on helping her, but when it gets too deep I may have to tell her I can’t give, but she can come to stay with my family and me. This in and of itself will be tough, but I feel it may be a better answer.

Please help you family, but help may be in another form and not the 10,000 they are asking for. I’m going to take a guess and say that maybe he needs job leads and not a loan? Maybe somethign close to that effect?

xavier

Instead of trying government program, you can suggest your friend to babysit one or two babys at her home, and that she will make quite some handsome money.

The small the babys, the more money, say, may be $50 to $100 a day. and she can place free ads on craigslist.org to get lots of request.

I know many old Chinese ladys came to the US without speaking good English to find any job; they babysit kids at home, and able to make payments, and after years, some already paid off their mortgage.

Another thing she can do is rent out a room, again, thru free craigslist.org or many other Internet website, and get $500 rent extra each month.

If her house near university or college, you got lots of students looking to rent a room or double room.

So, she can buy a bunk bed and some furniture like desk, bookshelf, and rent two college kids each collect $400.

Negotiate with mortgage banker is last thing you want to do. If you really want to do so, call 800-300-1338 the President Obama's new program.

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But what if the relative/friend is not living beyond their means? I have loaned $10K to a friend so she wouldn’t lose her very modest home and be on the street. She lost her job of 29 yrs and is a single mother. She has tried every gov’t program thus far and is trying to work with the mortgage co. who will not budge on renegotiating the term of the loan(it’s a variable rate). I loaned it expecting to be repayed and now needing the $$ myself but I know she is not living beyond her means, she merely trying to live.

I loaned my sister-in-law money to pay her car loan that had gone into default. She could barely afford to pay me back in monthly installments, and I had to ask her every month if she's able to pay. What infuriates me is seeing her and her family buy designer clothes and small luxury items (videogame consoles, ipods, cellphones) before paying me back. And to think that she drives a nicer car than I do. This is going to be the last time I will give a loan to anyone!

… Between a "gift" and a "loan", there is a 3rd way which is called "match".

… If you do not have, say, $10,000 to loan your sister, nor do you have $10,000 to give away as a gift, maybe you can hold a "fund raising party," inviting hundreds of your friends and colleagues to kick in some help, and you match [their funds]. It will work very well.

It is like a baby shower — everyone kicks in some useful items to help a young family with a newborn…

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I say no, don’t loan the money. If you can afford to make a gift and want to, do it. Loaning money and expecting to get paid back is a recipe for trouble.

First off I feel your pain. My mom is in the same fix, but not at that level. I plan on helping her, but when it gets too deep I may have to tell her I can't give, but she can come to stay with my family and me. This in and of itself will be tough, but I feel it may be a better answer.

Please help you family, but help may be in another form and not the 10,000 they are asking for. I'm going to take a guess and say that maybe he needs job leads and not a loan? Maybe somethign close to that effect?

xavier

I believe this depends on person to person. I know I can trust 100% two of my brothers. My third brother might be different…
Anyhow, get the loan in writing just in case. Also have a plan on how he will pay you back and what will be done in case your brother in law can't make payments!!
Ideally, if you need the money of course don't lend it, but if you can help and you take precautions… I don't see why not!

I would be wary, too, of loaning money [to anyone!] during this time of financial crisis. That being said, I have been on the receiving end of loans from within the family. My mother loaned me the funds to put up a Down Payment on my first house, which I paid back, with interest, in about 2 years. She also 'bridge-loaned' me the funds to upgrade and put a down payment on our 2nd home, until our first home sold and I paid her back, again, with interest.

So, I say, each situation is different. Look things over, very carefully, because, sometimes, the tough love is the best thing that could happen. You would not want to simply be postponing the inevitable and never get re-paid. You would not want the bad feelings.

You always want to loan and help those who needs, in addition to your friends and families, as I always did.

Two years after 911, I had an ex colleague at Merck called me at JP Morgan Chase, and I was so glad to take him to the best Thai restaurant in Wall St. When dishes came, he started crying …

He said, "Cheng, I have been so afraid of becoming homeless, but you know, last night I finally realized, I AM!"

That day he already had no $25 to go back to the hostel he stay, and just store his luggage hostel will charge $5.

I gave him $200 and bought him a NYC subway pass to start with, and provide him one Homeless Soution, asking him to "find a furnished room". …

Every day, he came to join me, and I printed out manuals for jobs he found and emailed me from 42nd St EasyEverything where there are 800 Internet computers that I paid him a monthly pass to access Internet.

They we walked over to Chinatown have lunch as if we were still colleagues at Merck going to lunch each day. Every time we ate, we discuss his progress on job hunting. …

I can never forget that heart broken moment of my ex colleague…

Keep in mind, people are strong and hardly cry, but when they do, they are really in no hope. If they choose to tell you, may be as friend, colleage, or family friends. In their heart, you are he LAST resort, and most trustworthy person in the world left.

I would help, and always help. Why not?

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I’d never lend a relative money again on the understanding that they’d repay it. I’d rather they just asked for the money outright than maintaining they’ll pay it back.

I have watched relatives suddenly find money for other things rather than pay back loans they asked for and it is galling.

People here who say “no loans period” need to be put on the spot to see how they would react then. Maybe you are all over for dinner and suddenly a relative breaks out with a sob story that needs a loan. You going to say no? Sure it would be easy if they took you to one side and asked in a professional manner, but be assured they will ask you in front of others and make it seem like you are heartless if you don’t say yes.

Whether or not to lend totally depends on who's asking for the money. If my brother asked, I would give him whatever I had, no questions asked. He's hard-working, dependable, and good with his money. I would have no doubt that he really needed the money for something important and that he would pay me back ASAP. On the other hand, if my sister asked for any significant amount of money, I wouldn't give it to her. She's irresponsible and makes poor choices. Maybe she'd be mad, but who cares? If you can't tell your family to go to hell, who can you?

Never lend money to family but give what you can. If you can afford to give them $1,000 instead–go for it. This would prevent them from ever saying you never helped them and at the same time you are being responsible by letting them work out their own destiny.

The borrower is slave to the lender. Thanksgiving dinner will never be the same. They need to stop borrowing their way out.

Do not lend family money that will destroy your relationship with them if you do not get it back. If you have the money, you can make it a gift to them – and then, if you get it back later, so much the better. But if you love your sister and have a good relationship with her, do not make it a loan and give in to the potential to destroy that relationship.

I am currently subsidizing an unemployed friend's gas & electric bill; another friend subsidizes her rent. We do not expect to get the money back from this endeavor – we value her and her friendship at the point where the money is not important. We know that she would do the same for us were our positions reversed. If you can say the same for your sister & brother-in-law as we do for our friend, and you can afford the cost, then give them the money.

I say no, don't loan the money. If you can afford to make a gift and want to, do it. Loaning money and expecting to get paid back is a recipe for trouble.

The reason your trustworth friends and family did not pay you back is because you made loan like a gift. What you should have do is, ask to exchange the loan for a post dated check, say, 30 days back, if small loan. For bigger amount, make it, say, 60 post dated checks paid each month throught out 5 years.

Imagine you go to bank and borrow money, and bank just cut you a bank check without making you sign any paper, will YOU pay back? No, you will think your bank is the best bank in the world and GIVE you money at your request. This is what your trustworthy friends or family think.

So, do not get upset. Go BORROW some money back from your friends and family, they will hand you some, and not expect you to pay back. You just have to do your own accounting in heart.

Offer friends or relatives to stay may or may not making sense. For short term, say, a few days on travel to save hotel money, or short term to save deposit or first month rent may be fine, but longer than 60 days often cause many other problems. e.g. you let your sister family live in, and later you may find your brother-in-law sleep with your wife…

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After lending money to extremely trustworthy friends and family, I would never, ever lend money again. I would gift, but never lend.

I’ve been in a situation where I could pay my bills but that was it, and lent money to someone who was about to have utilities shut off. I found out later that the money was spent on hair highlights, restaurant visits, and alcohol… items we could not even afford.

Another person couldn’t afford to pay back $800 we loaned them 5 years prior, but could afford extravagant gifts for their partner and multiple vacations.

In the story’s situation I would offer the family a place to sleep while they find new accommodations, and that offer would have a timeline, say 30 days. Obviously the family is not responsible enough to budget, save, or spend within their means. If the threat of losing a house isn’t incentive enough to be responsible, nothing is.

I'd never lend a relative money again on the understanding that they'd repay it. I'd rather they just asked for the money outright than maintaining they'll pay it back.

I have watched relatives suddenly find money for other things rather than pay back loans they asked for and it is galling.

People here who say "no loans period" need to be put on the spot to see how they would react then. Maybe you are all over for dinner and suddenly a relative breaks out with a sob story that needs a loan. You going to say no? Sure it would be easy if they took you to one side and asked in a professional manner, but be assured they will ask you in front of others and make it seem like you are heartless if you don't say yes.

But what if the relative/friend is not living beyond their means? I have loaned $10K to a friend so she wouldn't lose her very modest home and be on the street. She lost her job of 29 yrs and is a single mother. She has tried every gov't program thus far and is trying to work with the mortgage co. who will not budge on renegotiating the term of the loan(it's a variable rate). I loaned it expecting to be repayed and now needing the $$ myself but I know she is not living beyond her means, she merely trying to live.

Its a shame the ones hurt hardest by this are low-income people that got mortgages they could barely afford under good conditions. They can thank Bill Clinton for causing this by forcing the banks to accept their overpriced, high-risk loans back in 1995. Now they have lost their homes, equity and credit ratings. When I hear these people complaining about their relatives living beyond their means, It reminds me that the largest expense in most people's budget is income tax, which is typically 36% of their income. Now we're all scrambling to help each other, while the Democrats and Republicans in government live far, far beyond their means. The Dems just started off the current administration's first year by dipping a nearly a trillion bucks out of the pork barrel.

Let's demand a start to fixing this: Any money (in any amount) loaned or donated to a family mamber for ANY reason should be TAX-FREE! Warning – Its the 'for-the-poor' Democrats currently in power who are totally opposed to this!
As far as not supporting Churches (Please see Phred's earlier comment), Churches are nearly 100% efficient at dispensing charitable help to those who really need it – But the Dems have created this monstrous welfare state — which dispenses to those who yell the loudest regardless of need — and sacked the rest of us to the point where we can't even help our own families any more, much less the truly poor via the churches. But those who yell the loudest will, for sure, be getting their monthly 'entitlement' checks – from our earnings.

This arrangment is one correct solution. Many Chinese immigrants I met working in NJ China Buffet, e.g., they rent a room in NYC Chinatown, and husband and wife went to work in different restaurants out of states, and during holiday, often Monday in Chinese restaurant business, they went back to "home", just a small room rented in a house. Also, Chinese restaurant often provide late lunch and late dinner free, and "dorm" nearby, so each can save $1,000 to $2,000 each month.

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My brother and his wife are losing their home. I am willing to take my brother in but the sister in law has to go live with their grown daughter where she is needed as a babysitter. I need my brother to work in my yard.

About 6 months ago, I gave $2k to a relative who was "hard on his luck" and needed transportation to get to work. Now, he's a car owner who doesn't work and I will never get my money back. If you value a family relationship, don't do it…

My brother and his wife are losing their home. I am willing to take my brother in but the sister in law has to go live with their grown daughter where she is needed as a babysitter. I need my brother to work in my yard.

After lending money to extremely trustworthy friends and family, I would never, ever lend money again. I would gift, but never lend.

I've been in a situation where I could pay my bills but that was it, and lent money to someone who was about to have utilities shut off. I found out later that the money was spent on hair highlights, restaurant visits, and alcohol… items we could not even afford.

Another person couldn't afford to pay back $800 we loaned them 5 years prior, but could afford extravagant gifts for their partner and multiple vacations.

In the story's situation I would offer the family a place to sleep while they find new accommodations, and that offer would have a timeline, say 30 days. Obviously the family is not responsible enough to budget, save, or spend within their means. If the threat of losing a house isn't incentive enough to be responsible, nothing is.

I have carefully read the question and answers and all comments posted, and I feel obligated to share my solution because, it seems I am the only one has the correct solution.

First, my sister's travel agency got impacted after 911, and she and her company faced a serious problem if the cash flow dried, many lenders will, all of a sudden, request loan paid in full. I wired $100,000 over to her account in California.

With that kind of trust and support, all her friends and lenders decided to help and not asking back the loans; it ends up $100,000 is not needed a few months later, then she used it as down to buy an apartment building.

Then, I spend a few hours over phone to teach her how to become top realtor, and later she did became top 5 realtors in California, and sold many houses and, of course, make lots of commissions. Later she not only paid me back all $100,000 loan, but she also paid back all her loans, and she told me, she own many million dollars house clean and free. She is very happy when one day she because debt free yet own huge assets, mostly rental buildings.

One tip that none mentioned or ever heard of is that I asked my sister to cut 60 $2,000 checks posted dated for 60 months (i.e. 5 years) and send over to me before I wired the $100,000. So, I will deposit $2,000 check each month, and she can totally forget about repay the money, thru out 5 years, I will get my $100,000 back plus some interest that I could have obtained from bank CD's.

I also helped thousands of homeless American families over Internet. One family in MN, wife lost job after 911 as travel agency manager, with two daughtrs, and husband lose job year later, their cars were 90 days behind the GMAC car loan.

What I did is loaned them $4,000 to buy a used car and returned their car to GMAC to keep credit, instead, they send me 40 $100 post dated checks that I deposit $100 each month, it is much more affordable than GMAC $300 car loan each month.

Then I loan them $3,000 to rent 2br apartment for 6 months to move off basement of brother, and they sent me 30 $100 post dated checks, after all, just the storage cost for their furniture, stuff, … cost $75 a month.

I cite this example is because for all these years, they have paid me back all the loans, although once in a while, they requested a break, so I just asked them to send several $100 check with post date AFTER the date of last check, and I return the checks of the break.

And, I NEVER knew them before I loaned them money, and I Never saw them thereafter either after they paid off the loan.

All I want to share with you is that American are trust worthy with excellient credit, whether they are your families or strangers. It is a matter of "correct method" to do business.

So, if you want to help your sister and brother-in-law, I would say, I would like to help them too. Ask them how much they can pay back each month, and how that money come from (or can be saved from). e.g. Instead of paying $300 car loan to GMAC each month, I know if I loan the family $4000, they shall be able to save $300 the car loan, and pay me back $100 is easy.

So, if your sister can pay you back $200 a month, you can ask them to cut 60 $200 checks, post dated to you in exchange of your $10,000 loan. So, the loan will be paid back in 5 years, and you shall make $2,000 interest over 5 years, that's about 4% each year, roughly 5 year CD rates.

You shall not have any problem either because with $200 monthly stream, if you need to borrow money, say, from credit card, or personal loan from bank, you can use that $200 to pay for the loan, say, if you need to buy a new car.

From my reading, your sister and brother-in-law are good people and responsible ones. They bought the house because they could afford (otherwise, how to get a mortgage approval?) Everyone may have difficult time through out their life, especially, during economic down turn when laid off is NOT volunteerily.

So far, I am probably the only one knows how to save American financially, but I have tried for over 6 months, my voice were not heard, say, by President Obama, and White House phone is always busy.

For your sister's case, they can go to Dept of HUD to apply for Section 8. Section 8 has many unfamiliar program, in addition to help rent, one program is to subside part of the mortgage payment for American to own a home.

I believe the root cause of this financial downturn is "housing", and the solution is thru Dept of HUD, NOT Dept of Treasury. All HUD need to do is expand Section 8 on mortgate subsidize for very small % of homeowners like your sister, and, all of a sudden, all mortgage papers are valid again.

The cost would be much less. e.g. if your sister needs $10,000 to get by for a year, the cost would be $800 a month, otherwise if their home got foreclosed, the $200,000, e.g, mortgage paper will be no value, no matter banks, AIG, foreign investers … or etc holes it.

I say I am probably the only one knows the cost effective solution is because I both worked for Goldman Sachs and help thousands homeless families. You need to have both experience to be able to come up the cost effective solution, and President Obama's team does not have such experience so far.

I document the solution in my Homeless Solutions, so if you google "homeless solutions" you can get an idea, and many be many solutions can help your sister family as well.

Without cost effective solution, you may end up like Bloomberg of NYC mayor, spend $33,000 averagely to help each homeless family to move off homelessness, whereas, I can do it for just a few hundreds to a thousands.

But $33,000 to Bloomberg is nothing compared to the wealth he has personally. That's why when you have billionaire in power, taxpayer may end up pay much more to deal with same problem.

The one biggest thing you forgot to mention is ask your family member how he or she plans to pay you back and how they plan on continuing to pay the mortage after you gave them the money and how long will the money you gave them last.

Of course you shouldn't lend money to a relative. Not now anyway. If you've been watching the news at all, you now know that the Feds are going to bail out my relatives for their mortgage problems, their education related expenses, healtcare costs, etc. I can't remember how I survived prior to the Feds taking care of me and my relatives. I love our new President….the ultimate "sugar daddy". Thanks in advance Mr. President for all the help coming my way!

Hello Whitt from Quincy, MA:
If you feel that giving the money to these down-on-their-luck relatives is a good idea, I have a great idea, and that's send me a few hundred bucks.
There's no way I will ever give anyone my money, and I've learned the hard way never to loan it, either. Not only does it drag me down, it does nothing to encourage them to straighten out their financially irresponsible lifestyles.

This is a tough issue. Families should stick together in hard times. However, the sister was clearly living abover her means. It seems like President Obama will eventually force a bank to bail her out so you will be repaid.

I have never been more devastated in my life. For 27 years,I have worked and saved and had over $3 million in various accounts that are now more like $2 million. My investments were moderate and conservative and I got criticism that I should be more open to risk. Thank goodness I limited it. I saw friends buy BMW's while I drove a Honda. I saw friends take a year off to explore New Zealand and Africa while I went to the Jersey Shore. I bought suits on sale in Macy's and weekend clothes in Wal-Mart while friends went to Prada and Armani. My life was not bad but saving for the future was important. Zero debts. Now my high living friends determine that their credit card and mortgage and car debts are too much to handle and like everyone else they will abandon them once they suck out the final amount of cash possible.

I decided to change. First class all the way for me going forward and spend my savings away. It has proven useless to me and just a burden at tax time and a wasted to expense to a financial advisor. I booked a first class European trip – hotel, air, the works this year and am shopping for a new car. I will take on debt and spend my savings and hope to be bailed out in a few years. If not, then I can get serious and suicide is something to consider as well and would feel as bad as I feel losing a fortune when I did all the right things for years I was told to do. Wait for it to come back – get real – the world has changed – some guys enjoyed the ride and other stupid ones like me saved for the future.

Here's my penny ante philosophy
Bad things happen to good and bad people.
1) NEVER do business or loan money with family. However gifts and help are allowed. The reason for this should be self evident to anyone with any common sense.
2) NEVER throw good money after bad and trophy properties are never a good investment other then to build ego. Apparently they can't afford the ego.

This is just good old fashion horse sense. No one wants to see anyone fail, but failing is necessary for growth sometimes.

Wow ! all this great advice and no one really knows the details except he said that she said, and oh my past experience etc etc. Go with your heart … she's your sister for crying out loud! if you can help step up take care or it!If you can't replace the money then you have no business leanding it? However if 10k is just 10k, help your sister and don't expect it back. Then there is no hard feelings — get it !

If this guy is asking a third person if he should lend money to his sister and her husband, then I think he's already got the answer. This is doubt and he's trying to convince himself that "No" is the correct answer.

Now with the stimulus bill in play… this is an opportunity to get a loan modification especially since he can prove hardship. There are numerous sample letters on the web that can be tailored to your siblings situation. The banks are being mandated to listen and weigh each circumstance with a high chance of extending the loan over 40 to 50 years, decreasing the annual interest rate and decreasing the amount due each month. Plus, they will take whatever is late and put it on the back of the loan which adds to the principal.

My husband & I have been dealt a set of circumstances that are too long to share today, yet, we have been able to survive by the help of many family, friends loans and worked with all creditors to set a lesser payment but had a plan to catch up thus helping us to stay afloat…

If you do not lend the money, please help your family to be better educated in using all the tools available to them which can be found on the web….

May God Bless all American Families!

NMarie

My wife wanted to give money to her parents when she went to visit them out of the country. It wasn't much money and wouldn't have hurt me, but her parents have house maids. That do the cooking and cleaning. I don't have a house maid. If someone needs money, they need to cut out all frivolous things before I feel any sympathy.

NEVER ever lend money to a relative or friend. First off it will forever change the relationship.

The idiots in Washington think we should let people stay in homes they cannot afford, I disagree.

Offer to put them through Dave Ramsey's financial peace class because they desperately need the help.

Then if 10K is an amount you will not miss, you can give them it or a different amount, as a gift not a loan as others had said.

If that 10k eats away at your emergency fund, and puts you in a bad way in even the slightest way you have to honestly tell your brother in law that you cannot afford it as you do not have that kind of extra money.

If you can afford to lose 10K let them sign a second mortgage. You may never get your money back but you will be helping your relatives (remember: charity begins at home) and you will help them save face–at least in the short term. In the current economy no one is safe–we have to learn that we have lived the high life too long!

IMHO, you have to think of the $10,000 as a gift to your sister.

Don't expect to get the money back; ever.

Don't expect them to actually use the money for their house payment. I have seen it many times that family members turn around and use the money for other necessities, like a cruise, European vacation, or even a night-on-the-town. All the things you deny for yourself.

Do expect to be #1 on their list, from now on, whenever they need money. You were their patsy once, you will be their patsy again.

Based on my own experience, I have to agree with one point that many people have already made: if you have the money and can afford to help, then give it to them. Lending money to family is simply not worth the subsequent aggravation it can cause. They can be absolutely sincere when borrowing it but then come up with any number of reasons later as to why they can't pay you back just yet, even when they have money to spend on trips and luxuries and such. Listen to what people are saying: Help if you can, but make it a gift; _never_ as a loan.

It really depends. As a frequent lender of money to one of my sister of laws I can tell you nothing can put a wedge in a relationship like money owed. Ask yourself, am I willing to lose $10,000? Will my spouse(if you have one) be okay with this? Is it really going to help? And finally, when to stop?

We were in a similar situation only it was our children who were in trouble. Yes, they were in a home that they should have never purchased; however, that was history at that point. We ended up lending them the money, they lost the house anyway but we were able to declare the loan as a loss on our taxes (we had prepared legal documentation for the loan). Bottom line, do your homework to protect yourself before you LEND them the money.

How are you going to feel when you find out they're going on a nice vacation and you haven't been paid back. What about when they go out to a nice restaurant, that you've never gone to because you can't justify the cost to yourself, and you still haven't been paid back.

Lending money to someone who can't get a bank loan isn't a good idea.

If they've been living outside of their means then a new job isn't going to help because in this market his salary isn't going to go north. I would just tell them that you aren't in a financial position to help out. And before you concern yourself with the ramification, remember they are the ones who started the awkwardness by coming to you.

When they lose the house (a harsh lesson which must be learned), then as family help them stay off the street. You must view any money provided as a gift, and state your reason as paying it forward. It's a lot more likely they will step up and pay back the money used to help them stay off the street than any monies you provide to allow them to stay in the present house.

I have loaned family members money before. However, I knew their circumstances and their ability to pay back. So far, I've never been out any money.

I think you have to know who you're lending money to, family or not. I wouldn't lend money to an immediate family member in the situtation in this article because chances are that I would never get paid back.

As much as hard feelings could develop for me not lending the money to help them out in a bind, much worse tension would arise if the money wasn't paid back. I'm not in a financial position to lend such a large amount and not feel it if it weren't replaced.

If you loan it, you may not be able to get it back when you need it. I am in the same situation right now.

I loaned $20,000 to a friend over two years ago with promise that he will pay it back as soon as he finished a second house he was working on and sell it. Up to today, I am still waiting. Luckly I got a promissory note (notarized) which is secured with his equity interest in the property he lives in, and I have recorded it with the state.

There 2 simple questions to ask.
1. Can you afford to lose $10K?
2. Will it bug you if you lose $10K?
If you can not answer yes to both of these, don't lend the money. You don't want to mess up the family over this. It is not worth it.

It is apparent you already know the answer to your question – you just need affirmation that it is "ok" to give it.

Loaning money to relatives and friends is never a good idea and as one person stated now that you have been asked the question you are in a no win situation.

So, if you can not give the money (instead of loaning it) without a risk to your families well being (now or in the future) then find other ways to help your sister and her family.

Family should always be there for each other … but that doesn't mean you need to give her money. How about helping with food, cloths, toiletries or things they might need for school or work – like filling their gas tank? These are essentials that they need day to day and can help ease the burden of what they are going thru.

It may not be exactly what they are looking for or hoping for but in the long run these things will help more then a temporary bail out that has the potential to destroy your relationship.

People, Please DON'T ASK your family for help. Your family is far more important than the situation you may find yourself in. Your family will know you need help and will offer it if they are able and then you should say no thank you! On the other hand, if you suspect your family member is in need it would be very appropriate to do what you can to alleviate the problems. Gift cards to grocery stores or clothing stores is a good way to help. The money they would spend on food/clothing can contribute to the mortgage payment. Remember, not all people in trouble these days are there of their own doing.

The answer is right on! I've seen what "lending" money can do to son/mother/father relatioships. As one person stated it's a lose/lose situation. As for the person who said that it took years to get over the fact that their relative wouldn't co-sign, that is unfortunately so typical of how people think. "I got myself into this situation, and because you didn't help me it's your fault and I'm mad at you". Who the hell caused the problem? Not your relative. Take responsibility for your actions! Co-signing a loan means you are on the hook. Unless you can afford to make the payments by yourself (and you won't be pissed off, at the same time), don't do it. That is sound advice. And anybody who doesn't understand that, doesn't understand money management 101. I don't get it why people don't get it.

I'm finding these comments interesting. I agree with the statements that you should never LEND to family, but GIVE it if you can afford it.

But who determines "if you can afford it?"

Can you afford it if it means not setting aside for your retirement for the next 18 months?

Can you afford it if it means taking it from the 50K you've diligently set aside for Jr's college?

Can you afford it if you take it from your 401K? (The resounding answer on that these days should be NO!)

Someone said to lend/give it, if you bring in 10K a month. Well, my household brings in 9K a month. But we bought a house we could afford, have no revolving debt, and drive modest vehicles. Our debt to income percentage is 19%.

But we're saving so that we won't one day be in the position that the questioner's brother-in-law and sister are in. Why should we jeopardize our future for people who made bad choices? They would say (my household) could afford it. I would argue we can't afford to live like they have and not focus on saving.

Finances are the number one cause of divorce. If finances can cause a husband and wife (the closest form of a relationship in the world)[to split up], then how can you honestly expect that it wouldn't cause a rift in your relationship with your sister, or parents, or whoever?

Also, people have said that if you love your family, help them out financially. My uncle inherited half a million dollars three years ago. He went on a spending spree buying a new truck, a new home, yada yada yada… He just came to me a couple months ago for financial help. Mind you I am a young professional having just put myself through college 100% on my own dollar…will be paying off for the next 19 years and 7 months.

I said no because I didn't have enough information. Turns out I made a pretty smart decision. The man apparently has a child that he hasn't been paying child support for…sure am glad I didn't give money to feed an addiction!

I finished college early in '93 so I could start working and bail my mother out. Then in '01 I gave her 15K to put down on a house and remodeled it. She has always worked hard but spends more than she makes to maintain the place. She's always getting credit card offers in the mail it seems! But I will always try to prop her up – she's just too damn stubborn to take it most of the time. This year I'm helping her refinance/consolidate, so we have a clean slate. It won't stay that way and I don't care. I'd rather make her house payment then see her lose the place. And I have the most understanding spouse ever.
None of this will ever come close to paying her back for raising me right. How many mothers, sisters do you have? What's wrong with people? This is your blood here. Forget giving it to the Church and Starbucks – give it to your family! I could slap so many of you selfish people.

I would never ask either of my brothers for money. Nor would I lend any if I was approached by them. It is a bad idea – unless you have the finances and willingness to access the real possibility that the funds will not get paid back. More often than not, you will disagree with their lifestyle choices and resentment will be inevitable.

We need to collectively learn to live within our means — and we are terrible students at this,

My parents had this same situation. They maxed out their mortgage to start a business (in their 60's) that failed. They asked my aunt for several advances on my mother's inheritance. In the end, they still lost their house, after blowing ALL of the $100k inheritance trying to keep it. Now I'm partially supporting them because my dad is now on disability. If only my aunt would have said no, they could have taken that $100k inheritance and bought a foreclosure. Now they have nothing.

I agree with Rich Ferguson. If you can afford to lose $10,000, make it a gift to them. You can make it clear to them that it is a "one of" gift. If you don't have the money to lose, then tell them so. That is what family means and they should understand. Analyzing their behavior too much and too deeply makes it a business decision, not a family decision.

That is a sound advice.

1. Would they do the same for you?
2. Have they borrowed from you before and were able to pay back?
3. Are they willing to let you sue them?

If the answer to all 3 is yes, then lend, but the condition would be to not lend it all out at once. Put it on paper, so it can be used against them in court, or used to garnish wages once he's working.

And in this case, your sister should be the one asking. Your brother in law should've exhausted all resources.

If he owes other people, you will be last because you're not harassing them the way collectors would be. If they're normally not the type to make excuses, then go with common sense.

Also, if this is going to put a strain on you in any way, help them out with other favors, even doing fund raisers, having them sell stuff off, offering to babysit, help with groceries, etc.

I'm not a fan of people's "tough love" advice because none of us know the situation or whether they've had a history of robbing Peter to pay Paul.

‘Neither a borrower nor a lender be, for loan oft loses both itself and friend and borrowing dulls the edge of husbandry.’ Wm Shakespeare, "Hamlet"

As i read most of the comments, i see why our nation has turned into what it is today– a me society! Life is not about money, whether your going to get the money back especially to a family member! If you can afford to give it, then give it and do not expect anything in return! Realize how blessed you are to have and help those who have not, or who are in trouble! You are not helping them do anything illegal and he had lost his job. One's primary concern is to help others not yourselves.

Blood is thicker than water. If you can afford it, then give them the money.

Recently, my sister asked for $2000. She was honest in that she said she may never be able to repay. She recieved a $45,000.00 in heritance from our grandfather a year ago and the money is gone, some to her own daughters. She is now bejind on car payments and stands to lose her car.
I have two children of my own and am concerned about their jobs, one needs a new furnace.
My retirement fund is about dried up because of the economy and I'm going to be 60 this year.
I've loaned money to family before and it's nothing but trouble, you resent them when you see they have money for other non-esentials but don't have money to repay you.
I decided not to lend my sister the money and I feel very guilty. On Monday I found out that I may lose my own job. There is to much uncertainty out there right now.

I think this is the time that we need to help others. But can you afford to let go 10k to help your bil? If you can, then pl do it. Don't expect it back nor don't expect any favors later on.

How long ago did he lose his job… has he gone through his savings yet? did they have any savings…?

What other loans [do they have] due that might also come back against the them…?

You are telling me not to bail out my own family, but the President is bailing out strangers with my tax money? Come on, give me a break!

Go ahead and help also provide some advice if it is welcome. Do not have any expectation on return but helping out is the right thing to do.

My parents are currently bailing out my sister for the 100th time – letting her, her husband, and two children live in their house, paying for lots of incidental expenses, serving as live-in child care (my kids don't get that), etc etc etc. Both my sister and her husband have full time jobs and make decent money, but due to historical debt and the inability to make a financial plan, they keep making bad decisions (hundreds of dollars on a child's birthday party, ATVs) and they keep getting farther behind. My sister's attitude is one of a victim to her circumstance. My parents' attitude is one of enabling that.

They refuse to go to a financial counselor (offered free through our credit union, by the way)and keep sponging off my parents. It will never end.

Has this caused bad feelings in my family? You bet. Will my sister ever even acknowledge how she is using my parents? Nope. She doesn't see it that way. She feels like she is entitled to everything because they are her parents and they are responsible for her. Will I be able to work through the jealousy, indignation and resentment at feeling like I'm somehow being punished for making good decisions? I'm trying.

Have your in-laws called Obama? He is working to get government money to folks who were tempted by easy money from private lenders and are now in trouble. From what you report, it is likely your in-laws will find this new easy money source will fit well with their personal money management philosophy.

What surprises me most these days is how many relatives ASSUME that you have the money to lend them or RESENT that your bills are paid but theirs arent! I have a son living with me while working and going to college – this causes no end of griping from other family members who resent the money I spend on tuition instead of hleping them buy a car, or that he can live in my house rent-free but not them, or that my house payment and utilities are paid while they face eviction (for the third or fourth time).

I am not RICH, just responsible. My salary may be higher than minimum wage but it costs nearly everything I make to afford the mortgage (fixed at a decent rate from day one) and keep the lights and heat on.

I dont jet over to Europe twice a year but if I did it would be the result of the good decisions I made and the salary I earned.

HELP is one thing but there are too many folks under water just now who feel ENTITLED to someone else fixing all their mistakes – mistakes they never learn from and will repeat first chance they get.

Bottom line in every case regarding family and finances. Don't loan money. Give it. Or don't. Loans between family members have great potential to cause long-term rifts unnecessarily.

Too funny. No one wants to lend to their brother or sister, but they're happy the gov't is stepping in to GIVE it to complete strangers.

So typical. Anyone who comes from a liberal family can appreciate that irony.

Do not loan relatives money.
They do not pay it back as promised…
Because of trying to bail out my brother and his son and my sister and brother-in-law, my
back is now up against a wall, I have a foreclosure looming and a bankruptcy once the dragged out foreclosure completes.

I would offer $10,000 worth of "advice". With some effort, I'd bet you could help advise 100 ways at $100 each to come up with $10,000. You could begin by providing a pad of paper and a couple of sharpened pencils.

Early in our marriage, both my husband and I were unemployed and we lived off our wedding gifts for a bit. We got a small loan from one relative and an extra gift from another. Once we were back on our feet, we repaid the loan.

For the last few years, we've been able to give money to relatives, but we don't give more than we can afford. When one asked for a sizeable loan for a business, we gave only what we could afford to lose as a "business investment." Good thing we were so cautious, as the business went under right after.

Never loan more than you'd be willing to give. If you have it to give, consider it. If not, not.

I think close family members should get the benefit of the doubt one time only. "Lend" only want you can afford to give as a gift. Make the expectation of repayment clear and negotiate a timetable. Tell them its a loan but in the back of your head, expect that it will be a gift. If they don't pay you back, you won't be super surprised or dissappointed. If they pay you back you'll be pleasantly surprised.

If they don't pay you back, then they'll probably never ask you to "borrow" money again. Even if they do, you'll have a great reason to say no.

The first thing I was taught about money management by my mother was:loan yes, gift yes, co-sign NEVER. My great-grandparents co-signed a loan to a family member and that loan bankrupt all of them.

I find it a little strange that his sister didn't feel comfortable enough approaching her own brother with this proposition and instead, hides behind her husband (bro-in-law) to ask for it….and P.S. I agree…don't loan it…their houseboat has sailed…

This is a no-brainer. People will not learn from their mistakes unless they experience the consequence of their action. This is an opportunity for the potential lender to be a teacher, not an enabler.

I loaned my older brother 2K to help him out of a similar situation and he lost his house anyway. Now he, his wife, and four kids live with my little brother. He still hasn't paid me 1/8 of what he owes and there is a lot of hard feelings. My wife now doesn't want to be around them and he is aggravated at me for calling and asking for $50 a month or whatever he can spare to pay me back. We need the money for our children too.

It is not always an easy decision whether to lend or not to lend to family and friends. I, on the other hand, will have to determine need versus compassion. A few years ago, I struggled to make ends meet as I was entering as a full-time graduate school and did not have a steady job with $150,000 in undergraduate student loans. It was tough. I learnt to shop with confidence by only spending $5 a week. For 4 years, I didn't buy a single new outfit. I didn't eat luxury foods… crap, I didn't even eat brand name foods. Imagine eating 5cent Ramen noddles and sphaghetti everyday for 4 years. No cell phone. No home phone. I showered and shave at the gym. With 3 $10 jeans and 5 Fruit-of-the-Loom t-shirts, I interchanged them everyday for 4 years. I recycled my clothes to not having to wash them for weeks at a time. I stopped all social events which involves spending more than $1. No movies. No bars. No clubbing. I sacrificed friendships. I worked nights and weekends doing odd-jobs that paid minimum wage. A few that I am ashamed of. Still, I wasn't able to survive. All in all, I was shamed of myself.

So, I swallowed my pride and ask my family to intervene. I was surprised to find my immediate family and relatives opening their bank accounts and offering help. They loaned me money to pay my rent, food, and repay my student loans.

That was merely six years ago. I will never forget their generosity and my struggle. Today, I am proud to practice medicine as a physician. Recently, my brother was in need of help. I did not hesitate to help him.

Everyone struggles in life. You have to make a decision as to whether the individual you are loaning your hard earned money to has a good or bad history of repaying their debts to others.

What would happen if you were the one in his shoes and in need of money? Would you like him to help you? or, would you like him to refuse and there's a high probability of ending up on the streets? If he has children, would you like them to suffer?

Surely, I wouldn't. But that is my own personal opinion.

Why is it your brother-in-law asking?
Talk to your sister(she is the blood-relative), also your wife(she is your partner and that money is partly hers).

Also, you need to know enough about what is going on to make sure the $10k is going to provide a long-term solution, and not just put off things for a few months.

If it was a "friend" asking for that kind of money, better to lose the friend, because if you loan the money you will likely lose the both the friend and the money anyway.

Let me tell you all a story of my first hand dealings with this issue. First of all, families should help each other and they do not anymore. If they do it's with conditions and the lender hang'n it over your head relentlessly. Case and point…my mother and father bought a home while I was a teen. My mother is disabled and very sick, aka thousands of medical bills piled up as my father lost his job due to possible age discrimination which is another story all together. They had to borrow money from my Grandparents who would scream at my mother, THIER DAUGHTER, and belittle my father. I promised myself at that young age to NEVER ask for money from them or anyone. Long story short. My parents car was reposessed and they were faced with foreclosure. If my family had "bailed them out" by letting them have or borrow less than 5 Grand they would of been caught up on their home and car payments and instead lost the car and sold their home, my home, at a ridiculously low price just to get out from under the payments.

So please family members do not have the same greed that Wallstreet has shown. I'm not one for hand outs but if you don't have your family who do you have?

I agree with most of the people who say it has be a gift.
Just make sure it's under the federal gift guideline or you'll pay a gift tax. I think it's currently $12,000. If you make it a loan, you can write it off as unpaid loan on your income taxes. And get it in writing or you'll up on Judge Judy.

You don't say anything about why he doesn't have a job. Is he on unemployment. What about your sister? Working too?

There are things they can do. Negotiate with the bank and creditors. Have a garage sale and sell things they don't need. Cut out all but the bare essentials. It's hard but can be done – Think basics. Food, clothing, shelter.

To quote a famous TV Dr. "Money doesn't solve money problems". Thanks Dr Phil.

How did the figure $10,000 come up? It could take him a year or more to find a job.

I can't tell you how many times my family asked to borrow money – never got a dime back. Now that I am older I just say, I'd love you help you, but I just don't have it or it's tied up in IRA's. The big mistake we make is sharing our financial situation – people now have no idea how much money I have. I live frugally and save. I don't go around crying poor mouth, but I don't give anyone the impression I have a of lot extra cash laying around. Works well. Good luck – like the one poster said it's a Lose, lose, lose propostion.

Years ago my dad asked me to bail out my brother by lending him $25,000. I said no. My brother fancies himself as a "stay at home dad" and is being foreclosed on for the 3rd time. My $25,000 would have never been paid back and my wife would constantly remind me how stupid I was to lend anything to "my no good brother."

If you loan a family member a large sum, say 5 or more of their mortgage payments, be prepared to not get that money back anytime soon, if at all. In todays economy it is likely that the problems that got them there are only going to get worse. Money notwithstanding, the cost to you will actually be the relationship you had with your family member.

Depending on the circumstances and my relation to them, I'd sit them down and talk to them.

I'd draw up a financial plan so (hopefully) this wouldn't happen again and ONLY lend them the money when they agreed to rectify their mistakes.

I would of course still assume that they would not pay the money back; this would be more for my benefit.

Y'all realize that "gifted" monies need to be claimed as income on your taxes, right? 10k here 10k there, it all adds up to problems when the auditors show up.

Lend only if you don't mind not having it repaid. On occasion we lent my husband's small amounts of a few hundred, which she paid back. Then she asked for $10,000 so she could stay in here house. We live modestly and in the black, but gave it from our savings. She promised to pay back so much a month. This she did for three months, then nothing. That was five years ago. During that time her son also asked for $4,000, which he would pay back out tax refund. He did not. We are not wealthy, but we have put no pressure on them to repay as promised. Now nobody mentions the loans. We rarely see them, which is fine. If we do see them, the relationships seem strained. If you can afford a gift, fine, but do not lend thinking it will be repaid.

I agree with the prevailing opinion that lending the money is bad. However, there is one possible win, win, maybe lose possibility.

She can loan the money to her sister & brother-in-law and have them “sign” a promissory agreement. If the loan it’s repaid in the designated time, then file you can claim the loss on your taxes….see win, win then the loss would be that the sister & brother-in-law might get into trouble if they didn’t claim the “loan” as income in said tax year.

If you can truly afford to loan the money, then this method allows you to help your family, protects your “investment” and will hold the borrower responsible to some degree.

I suggest that you tell your brother-in-law and sister what you ARE willing to do to help them. This may be several things including:
let them live in your home for one year,
pay for an apartment for 3 months,
provide fees for an attorney,
help pay groceries up to an amount of $500.,
give them a loan for $2000.
etc, etc.(whatever…)

However, I think that it would be a mistake to tell them what they SHOULD do. Instead, give them several things that you are willing to do, and then let them make their own decisions.

This way, you are making sure that they have a roof over their heads, and food in their mouths.

Buy the house and get ownership of it. (Get your name on the title) Charge HIM rent. Be firm. Do NOT think of him as a relative, but, as someone who put your sister at risk. Take care of your sister. Pray.

If you are in the position to help others you should. My wife has always told me what you give you get back ten fold. It may not be in money, but there are lots of wonderful gifts to receive like love and friendship. I have given family and friends tens of thousands of dollars over the years. Note I say gave. It may be a loan to them, but I have always considered it a gift. What have I done later is if they paid the money back, I loaned them more in the future if they asked. If they did not, I did not, since they did not repay the first loan. There were no hard feelings on my part when they didn't repay the money since I considered a gift, I just didn't give them more. On the other hand when the money was repaid, it made me feel great that I was able to help a family or friend. It also made me feel proud of them that they made such a commitment to me to repay the money. By doing it this way I have been able to help out a lot of people, and only refusing those that did not pay back…… Okay, so my wife made me give to some of them more than once anyway…. I guess I make it a guideline not a rule. People be as generous and non judgemental as you can, it does come back to you in many ways.

As I read it, the brother-in-law already knows he doesn't want to lend the money … and is looking to lighten the guilt trip by getting us to reinforce his position.

Excellent advice. Amen.

JC – I believe you have just spewed the dumbest statements that I have ever wasted my time reading. If I brought in $2 billion a week, I wouldn't loan/give them $100 if it was only going to prolong their terrible habits and bad behavior. That is like handing a drug addict a bottle of pills and saying that you can't make them stop so you'll just make them happy.

It would be a different story if they were in a low-income house and still could not afford it. Then you help them out because they are doing their best to help themselves out. However, the story claims that they are living beyond their means……which means they paid 400 grand for a house and they have a household income of 60 grand a year. I have absolutely NO sympathy for anybody who does this, I don't care if it was my parents! I would suggest very strongly that they move into low-income housing and then I would loan them the money.

I have been in this situation. Users (your brother-in-law) often get angry when they don't get what they want, much like children do. You'd want your own child learn from mistakes, right? So it is with adults who never learned personal responsibility in childhood. Don't give him a dime. It will just open the floodgates to more requests for your money. Plus, he'll never learn that he has to lie in the bed he's made. It might also get your sister to rein him in, and/or learn a thing or two about financial responsibility herself.

FYI ~~ do what feels right! You are the one that has to get up every day and look at yourself in the mirror. I now have my unemployed brother living in the basement of my home, my husband has lost his job, and I have had to pull my weight and get a second job. I'm doing what I feel is right!

Read Proverbs. Never loan money to a relative. Give it to them maybe but even then you are enabling not helping. Suggest credit counseling, offer to look at their total financial situation and offer advice if they are open. If they aren't chances are they are looking for a miracle so they sustain an unsustainable lifestyle. Also, have they already gone through their 6 months of emergency fund savings (I bet they never had one). Lots of options to look at before either lending or giving money.

If you are responsible with your own money, then the best thing you can do for your sibling is to provide some guidance. Give them some straight talk about living beyond their means and encourage them to get into a house they can afford. In addition, tell them there is no shame in finding a temporary job — be it minimum wage or more — while looking for something long term. They need to take responsibility for there own hole they dug themselves into and then work themselves out in order to affect a permanent change in behavior. If you want to do something to help them, offer to clip coupons, watch their kids or pets while they job hunt, or invite them over to dinner a couple times a week.

What do you call a "black hole"? That's where the money goes that you "lend" to family and friends.

A lot of comments (and the lead answer) seem to omit the most obvious point. It's not about whether your relatives can pay you back or not. It's about whether you want to help them or not. If you want to help them, then do it. Not as a loan, but as a non-returnable gift. If you can't afford to give them the money and truly say "goodbye" to it, then don't give it to them. Basing your decision on your god-like ability to judge their integrity is going to lead you to heartache. I don't believe in "loaning" to friends or relatives. Give because you love them and are happy to help and can afford to do it, or keep your money to yourself and don't help them. You're trying to "split the difference" and it can't be done.

My mom had an uncle who was very successful in his career. Often others in the family would ask for loans or other help. Sometimes out of genuine need, other times out of their own greed. My mon's brother asked for some money for college. After graduating he started paying it back. Years later the "rich uncle" told mom's brother, "Of all the people I loaned money to, you are the only one to repay me."

Now I am the one with a good job, and have been hit up for money, from my dad no less. After telling me he needed $550 a month for about a year, I told him I could provide $200/month and that he should charge his 2 friends living with him rent ($200/month seems cheap for a nice place to live). He said he could get by with that. Then 8 months later my brother's wife asked how much longer my dad would need money. My brother had been out of work for several months and they were living just on her income, and did not think they could keep sending dad $350/ month after the new baby would arrive. I was livid- my dad had said my brother couldn't help and that was why he asked me for the full amount. I stopped sending checks soon after that.

The lesson from my experience- don't loan money.

The response to the questioner may be financially sound, but misses the salient point. We have obligations to family that transcend mere self interest.

If you can afford to GIVE your relative some money you should do so, but without any expectation that it will ever be repaid. That way you will never resent it if you don't get repaid, your relative won't feel a burden of obligation other than gratitude, and you will feel that you have done your best to help them in difficult cicumstances. WIN WIN WIN.

Giving your sister a gift also makes it a little less likely that she will come back later asking for more money. Not to give your sister a hand if you have the means to do so will certainly cause her to feel deep and possibly lasting resentment.

Discussions about having your sister and her husband sell their "trophy" home and downsizing is probably unrealistic in the present housing market and in any case is unnecessarliy judgmental.

So, most of you say don't help family but agree with Obama that we should give more to the government so they can decide who to give it to?

IDIOTS.

big lols to john at high point…

i don't think the issue of this story is whether to help family/friends or not.

the issue and main point the author of the story/answer is making is WHEN/HOW to help family/friends that need it.

lets get real…..if these people are living beyond their means and then get into deep financial trouble because of a job loss, it would be STUPID at best to give these people money to continue attempting to live by a means which they cannot support.

i agree with the author that the family should pay more attention to the big picture….why give 10,000 now that will last a month or two when there's an option to work with the people to lower their lifestyle more inline with their means and help financially to get them going again.

only an iTard would say something like "lets help our families continue to live the lifestyle they can't support."

as confucious used to say "give a man a fish and he'll eat for a day. teach a man to fish and he'll eat for life"

Been there done that! a year ago i lent my brother 80k and still have not been paid back…and the wife carries on spending….dont lend money to family it will end up in a war…while i was slaving they were playing golf mid week ….and like a sucker i still bailed them out…

Unfortunately it is people like your sister and brother and law and their way of thinking that has caused what has happened in our country. People think they are entitled to things even if they cannot afford them but this isn't realistic. It's just like the saying how it's better to teach a man to fish than to give him the money to buy it. Instead of giving them money that they do not know how to manage, help them go over their income, make a budget, and help them come to a realistic conclusion. If they lose their house you will have to help them and perhaps lend your extra room to them. But wasting $10,000 isn't helping anyone and may hurt you as well. They are going to need you to be there when they run out of money so don't put yourself in debt trying to salvage their mistakes – just be there with advice and for moral support.

If you actually consider it a loan (expect it to be paid back), your sister and brother-in-law will feel awkward around you and/or will avoid you for years — because they won't be able to pay it back, and that will bother them.

I think "tough love" is called for here. If it were a $80,000 4 bedroom house in a cheap market, I'd say go for it. But if they don't belong in the house to begin with, you're just "enabling" them and postponing the inevitable.

The question contains the answer, this couple took a big risk buying a house that they didn't need but wanted and bought into that whole "lifestyle" trap so many Americans were suckered into the past 8 years. Enabling people that make bad financial decisions is wrong, instead let them maybe learn from their mistakes. I doubt anyone will let a family member starve to prove a point but if anything good comes from this credit and economic mess it might be a realignment of financial and common sense and return to sensible long term planning.

Sure, go ahead, but as a gift rather than a loan. If you can't give them the money and forget about it, then FORGET ABOUT IT!

Years ago I was in trouble in part because the cost of commuting to my job was too high and I was in the process of searching for a job closer to home. I DID need to make changes in my behaviour and knew this but needed help in the transition. I asked a relative to co-sign a loan (not asking for a hand out) but was informed "my accountant says this is a bad idea so the answer is no". I survived the harassing phone calls and slowly got out of this situation but not without a LOT of pain that could have been avoided if I got the help I asked for. You help family when you can as long as it doesn't bring you down by helping. If a person is drowning and you jump in the water to save them even though you can't swim, then helping the drowning person will only result in TWO people drowned. That was not the case in my situation and has taken years for me to get past the bad feelings this created.

To all of the people talking about how this person should lend the money no matter the fault of the family member asking for it – how would you feel if you had to "give" $10000 to a family matter who had bought a house that he/she couldn't afford? To top it off, how about if you knew that that $10000 would be a band-aid and the family member would lose that house 6 months down the road anyways?

The situation above is how it really is these days. Do you really think the brother-in-law will be able to find a job in this economy that will allow him to keep his trophy house?

Tell the brother-in-law that you will help him pay for a reasonable apartment if that becomes necessary but don't lend him the money unless you're willing to give him a $10000 gift to throw at a inevitable loss.

I think it has to depend on the situation of the person asking and the person giving. If the problem is hardship that was not caused by bad choices by the person asking and the person giving can afford the loan without putting their own finances in jeopardy, than I say loan. Otherwise, giving money to a person who was knowingly living outside of their means, family or not, is like flushing money down the toilet. I know from experience that once bailed out, people have a tendency to go back to their spending ways if their bad habits got them there in the first place. Those who hit hard times due to bad luck tend to work harder to pay back those who are willing to help them out. In no situation should you bail out someone if the loan could result in you ending up in the same condition.

Before making any loan, you should determine whether you can afford to loose the money. Make the assumption that it will not be repaid. If you're ok with this, then begin to consider the load.

Consider making the loan conditional. While you may not have the entire picture of their fiscal situation, you do have the benefit of a more objective point of view. Be honest.

Keep in mind: money comes and goes, but your family will always be there.

I would never ask for money or lend it, but if this situation came up I might offer to buy something of theirs like a vehicle. That way they get the money and you have collateral and you can offer them the chance to buy it back later.

My answer is "No" My own mother would constantly borrow money from me and that's just keeps me in the hole. She keeps asking and I keeps lending but the point is she is paying the money to where she say she is paying it to. Use your heart.

If you can afford to help them out, then give them the money as a gift with no strings attached. If you can't, you can't. Another option is to pay the mortgage itself, up to $10,000, in lieu of giving it to them directly. It's your money. A "loan" will cause the strain mentioned multiple times below. But whatever you decide to do, I'd really sit down and talk with your sister, and brother-in-law, since he's the one who contacted you, about what you're doing, why you're doing it, and make very clear that you're not going to be doing it again. That way there are no differing interpretations of what's going on. Also, if you're married, PLEASE talk to your own spouse before you do anything. Don't save their home just to ruin your marriage.

Previous experience talking here. If you loan family or friends money – DON'T plan on getting repaid. You have less than a 25% chance of ever getting any of it back. Emotions don't belong in a business transaction.

This question is a lot harder to answer than a simple yes or no. Everyone thinks the government should not bail out people that have catastrophic losses. That is what they have insurance for. Guess what even when you have replacement homeowners coverage, it does not cover all the damages. In fact Flood Insurance does not cover replacement cost or the limits of your policy, it is all depreciated and it is a problem when prices sky rocket because of demand. Last we all should remember starting out after getting married, we both worked full time jobs, we both worked Overtime and even put ourselves through school, but when it came time to see that a mortgage was cheaper than renting an apartment, we asked our parents to lend us some dough for the downpayment, which was returned promptly via payments for a couple months or so. Maybe the family should get together and help, not just one person?

Never lend money to friends/relatives – GIVE it.

Don't expect to be repaid, and if it's more money than you're willing to give away, forget it. Calling it a "loan" sets expectations that are likely to poison your relationship.

Wow, it's kind of sad that 80% of people in this country claim to be Christians, but none of you mentioned that the Bible says that if you don't help our your respective family, then you're worse than unbelievers. 1 Ti 5:8

While I can see the point you're trying to make, that lending him the money is 'enabling' him to live beyond his means, before I gave any advice to the person who asked, I'd need more information. IE, is $10,000 your 'life savings' or is it something you bring home in a month's time? If it's your life savings, I wouldn't do it. On the other hand, if it's a month's worth of salary / paycheck, you'd be a FOOL to NOT lend them money because if you didn't, your giving them reason to not want to see you at the holidays.

NEVER NEVER EVER loan money to family or friends. Either give it as a gift or don't. Don't subsidize someones lifestyle when they have lived beyond their means. Don't do it. Live to fight another day. It's called a g**d*m rainy day for a reason, because there is always a rainy day.

This is a wonderful thread. If you can afford $10,000, then give all (or part) of it as a gift to your sister. If doesn't feel right, consider a no interest loan that becomes payable in 2020.

Try to let your judgment about the trophy house evaporate like your 401K portfolio. A lot of people don't manage money well and that lesson is not taught by $10,000.

If you're willing to lend money to family, than you should be willing to let it go. Speaking from experience when family is concerned you should never enter into a money "lending" situation with the expectation of getting it back. If you can afford it, then give it. If not (or a member of your family is a complete deadbeat), then the answer's pretty clear…it's a no-go.

I've used this before for lending money to relatives, it makes it a lot easier.

http://www.virginmoneyus.com/

To John from Highpoint – the 'egotistical self-centered idiots' are the ones who bought way beyond their means and now expect their hard-working siblings to bail them out. The money would be better spent helping them get set up in an apartment, or in a house they actually can afford. No one is suggesting letting them become homeless living out of their car on the street. Does the word 'enabler' ring a bell?

I heard great advice once about loaning money to friends or family. If you can afford to give the money treat it as a gift and not a loan, that way if they repay it it is a bonus. This advice will also help keep the relationship intact.

I am surprised that this question is even asked because our nation's leaders continually say we're all in agreement that we must "keep people in their homes" and "prevent foreclosures." Funny how we think more when it is our own money! As for lending the brother-in-law $10K, I would say absolutely not. He can't afford the house and will only lose it, even if he finds another job. Don't throw good money after bad. Instead, offer to let your brother-in-law, sister, et al., move into your house until he can find a job.

Give your sister what you can afford to "lose" without getting it back. I'm sure a gift of $2000 is better received than a loan of $10K hanging over your relationship with family. I agree with Paying It Forward!!

My advice when it comes to "lending" money to friends or family is that no matter what they say, assume that you will never get any money back from them. Regardless of what their intentions are, they may simply never be able to pay you back. If you are ok with that, then give them the money, and call it a "loan" if you want to. But don't do it if it's gonna put a strain on your relationship if they are unable to pay you back.

Your brother-in-law is not facing reality. He can no longer afford to live where he currently is and is willing to bet YOUR hard earned cash that HE will make it through. If you give him the money, you're playing a fool's game. That's because if you DO lend him the money, I can guarantee he'll be back for more within a month or two. And then the game will continue until YOU'RE out of money too!

What your brother-in-law needs to do is SELL THE HOUSE, even if it's at a loss. Then he can move into an apartment or something else that he CAN currently afford. Otherwise (as is the case now) he is clinging to a dream that no longer exists and is not willing to face reality and come up with concrete steps ON HIS OWN (or with professional financial advice) to fix the problem. Instead, he comes to you for a quick fix, hoping that will be all he needs. I can guarantee that it won't be.

This sure isn't someone I would want to lend $10,000 to!

These are really tough decisions to make, especially when it comes to family. But it sounds like you're going to have to practice some tough love to make this work without it dragging you down with it also.

I wish you luck!

As a rule: I never LOAN money to anybody. No exceptions. However, I only give money I don;t expect to be paid back. As a rule! I've never regretted giving a single cent to anyone. Cause at the time, I knew it was the right thing to do for someone in need. Pay it forward!!!

Do yourself a favor don't lend money to a relative they think you owe them and they will never pay you back.

It's important to remember that your primary financial responsibility is to your spouse, your children and your future. Unless you already have enough money saved for the long-term, you will probably be neglecting these responsibilities.

Another question to ask is: What would happen if another sibling or relative comes knocking on the door for money? Would it be fair to help one and not another? Where does it end?

Finally, financial transactions within a family rarely end well. They almost always end up with bitter feelings and resentment.

Though their is little in your description to adequately say whether bailing out your sister is the right thing to do. I did note a couple of comments that make me feel you would really resent giving them a loan. One is the comment about the trophy home. 2. is comment that they always lived above their means. So with just those two thoughts I would say you would feel much better not being resentful and save your money. I instead would find them an appropriate debt consolidation firm and ask them to get an extenstion on their mortgage from the lender Before handing out any cold hard cash. I learned this the hard way when my relatives did the same thing and only after I got left holding the bag several times an several thousands of dollars poorer did I find out about all those other possibilities. Their is help out there. You just need to find it. And borrowing from family is the easy way out. That should always always be the very last resort.

While the simple answer, and probably the correct one, is letting them 'hang out to dry'; It's really a complex issue. Is $10,000 your safety margin (or a big chunk of it), and can you afford to give it to them? One should never lend money to family or friends, and even calling it a loan is fraught with danger. If it does happen, call it a gift that you expect to be 'regifted' back to you at a later date. Also, how long would this money help? Is it a 6 month patch, or just enough to keep the bank at bay for a month or two (the foreclosure moratorium might help, and they might even be able to work out a reduction of the loan). Is your brother-in-law likely to find suitable work, or is it likely that even if he finds work, the pay will be less than he needs. Also what is going to happen to them if they lose their home? The right answer might be to give them help settling into a more modest lifestyle, used car, apartment, etc. It's a tough choice and a bad situation, which unfortunately is very common these days.

Okay, I get this example noted in "Bailing Relatives…." It makes sense.But what about the folks that have worked hard, have always done their best to not live beyond their means, have had a few hiccups along the way and have asked for help occasionally (sp?)…who continue to work hard, but because of one spouse being self employed and having business dry up to barely anything and the other spouse working for a builder, with the fear of lay-off looming in the air…..AND you, the relative actually do have money to help, then is it okay to help your family out? This situation is a nation-wide situation. Lots of good people have been put to the test and despite their best efforts to be continuous, hard working folk, they have fallen on hard times and are really struggling. My belief is that, if you have money, and you are in a good place in your life and can afford to part with money, then you should help your family out, keeping in mind all these things I have mentioned. If the relatives were ridiculously frivolous (sp?) then of course- don't lend any money. There are so many good people who need help. If you can help, I think you should. And don't expect anything back right away, it's hard enough asking for help in the first place without that added pressure. Have a generous heart.

If you're willing to give them the money, then make the "loan". If you need it back, then the advice is spot on.

I just get so amazed at people. Have we become such a nation of egotistical self-centered idiots that we have to even think about helping family, friends, and neighbors? Apparently so.

Look at your history lessons. People during World War II all pulled together and helped each other get through the crisis. Did that mean that some people didn't whine about making sacrifices? No but they sure got put in their places about it.

We are in a dangerous position in our nation because we are very vulnerable due to the economy yet people are still, after everything that has been happening since September, people are so stupid that they can't see that by helping a family member out or a friend or neighbor, they're helping themselves out too.

We better be careful about not wanting to help each other out. You never know when you might need it someday. Don't be dumb enough to think it couldn't happen to you.

We found ourselves in the same situation last year. We opted to help them with money. Yes, we realized this monetary help would only be a bandaid to the inevitable. Families should help each other when they can… if they are paid back, then great..but if not..at least they can go to their grave knowing they made a act of kindness to family. We help way too may organizations throughout our lives..lets start helping our own family first.

Why would you lend your sister 10,000 to live in a house she can't afford? Don't do it unless you can afford to blow 10,000 because she will not repay you. I wouldn't.

Hell no you shouldn't loan him the money…it will only add strain to your relationship with them. There's a reason why they say "don't lend money to friends and family". I found out the hard way when I loaned $550 to my step-sister who I grew up with. She has avoided me like the plague ever since, doesn't return phone calls, and I'm thinking I'm going to have to take her to court to get the money back. It didn't have to be that way, but she is irresponsible and it sounds like your family is the same. It doesn't mean they are bad people, it just means they are committing to promises they cannot keep. The road to hell is paved with good intentions and yours will be too if you loan your family the money. I wish I would've listened to my wife when she said, rather than loan my step-sister the $550, we could have given her $100-$200 and not worried about getting it back. The $550 won't kill me, it's really just the principle. But it sounds like $10K might kill you!

Take it from someone who's been there!

This is exactly what is happening across the U.S. — people bought homes they could ill afford, yet the government is asking the rest of us taxpayers to bail them out. Heed this example and its advice! THIS IS GREAT ADVICE!! Now if only it were enforceable.

This family and the hundreds of thousands like them across the country will NOT be homeless — they'll just have to live in an apartment or something else they can afford. That way, the over-bloated home prices will also come down so the REST OF US can afford a home. Thank you.

The above answer is no different than the current stimulus in my opinion. As stated above "postponing the inevitable" as the credit that was given to everyone is part of this mess and now let's free up the credit so everyone can borrow,borrow, borrow. As Dave Ramsey say's "the borrower is slaved to the lender" Let's get back to basics and live with in our means, the government will be asking for this money back in a big way at some point.
As far as lending money to your brother in law and sister. If there is 10k in equity in the house then let the banks lend it to him after all that's why they just received the bail out/stimulus money.

Just like many of Americans who have found themselves in difficult finanicial times. Reevaluate your funds and reorganize your life style to fit your current situation. Borrowing money only prolongs the bottom line.

Can I Borrow some money from you?

FATAL QUESTION!

Yes, You Lose. No, You Lose.

If they have to ask, they can't pay you back. End of relationship.

If you say NO!, End of relationship.

It's Lose/Lose.

This is experience talking…

You think you can trust them, they're your family after all, right? Never. Family members are the most likely to feel they are "entitled" to YOUR money. I have done this for you for years, I bought you expensive gifts (when I had the money), etc, etc…. Everyone is the maker of their own destiny–let them help themselves!

I disagree. It is your sister, and she has asked you for a favor. If you lend her the money, the worst case scenario is that you are out of $10K. The chances of that are small as people typically pay back. If you don't, you will be blamed for not helping when help was needed and a request was made.

BRAVO! Great answer. If my family member lost his job and couldn't pay the mortgage on a house he can afford, then I would help him out. But not when he participated in the greed of buy bigger than you can afford and keep wishing for a solution.

Lend half the money to your sister.