Loaning family money (No OT)

Long story short. My mother in law and her boyfriend have struggled for pretty much their whole life. They are ok with dead end jobs like working at Walmart and not moving up and living off minimum wage. So one day my mother in law got yelled at by one of her managers in front of customers and employees. This pissed her off, so she walked off the job and went home. She didn't even stay to put in a complaint or anything and she found out later that the manager was let go from the job. As I said before, they're constantly struggling and she has yet to find a job for about 2 months. She hasn't even looked hard and is now talking to my wife how she's going to be doing some bullshit website where she gets people to order products, hosts parties and make commission. I don't know all the details, but it's not the answer.

So now they're struggling to pay bills. They can't pay their rent this month. My mother in law asked her other daughter to try and get a $1000 loan for them to pay some bills and have a little extra cash to get by. She was declined, so now my wife wants to try and get the loan for them. Am I the bad guy for not wanting to do this? We have always given a few hundred to them here and there when they need help, so we do help. But we have our own bills, my wife just started working after finishing school. We have credit card debt that we have a plan to pay off and now her school loan. Am I wrong for not wanting to to this? I do not have faith in my mother in law being able to pay it off.

Just an FYI, my mother in law's boyfriend works at Walmart as well but is paying a lot of child support so he only gets like $500 paychecks.

How can I get my wife to listen to me? It's hard for her to see her mom struggle and I understand that, but that would just put more added stress on us. She can't pay her bills now, so how would she pay us back for the loan? She already skips bills on holidays to buy presents and stuff. She would probably just skip more bills to pay us back.

Sorry for the blabbering, I just got off the phone with her and she's really wanting to do this loan.

Before anybody asks, we have made some mistakes financially. I make pretty good money. But with our mortgage, 2 car payments and credit card payments and soon to be my wife's school payment, we have our own debt to worry about. Now that my wife is working, we'll have extra cushion to put away for emergencies, along with pay off our debt. We have learned from our own mistakes and are working on fixing them. Needless to say, we do not have the cash to just loan her at the moment.

There are some websites that will manager loans like this, they take care of interest and such, and provide a means of legal recourse without having to get a lawyer of your own to draw up documents that take care of what happens in the event of non-payment. Again that would only apply if you actually decided to give her a loan which it seems like you're against.

First off, she never should have walked off a job if that income was needed. Pride is no excuse, especially today when unemployment is out of control.

Second, never loan family money. Either give it to them with no strings attached or don't do anything. No good can come from family loans.

Quote from vec : First off, she never should have walked off a job if that income was needed. Pride is no excuse, especially today when unemployment is out of control.

I know and that's exactly what I told my wife. They struggle enough that she needs to suck it up and move on. She needs her paycheck. The main thing is my wife hates seeing her mom like this and wants to help.

If you start handling out money, you'll never see it again and they will keep coming back for more.

You can't protect people from themselves. If you want to help them, give them advise and directions on how to get back on their feet and save money.

Quote from vec : Second, never loan family money. Either give it to them with no strings attached or don't do anything. No good can come from family loans.

From personal experience loaning money to anybody is a bad idea.

Someone once told me: If you want to break a friendship, loan that person money. I should've listened.

If you want to loan family money, you have to realize it's not a loan. It's a gift. If you and your wife don't want to donate 1k, then don't provide this "loan". If you really want to help her and gift her 1k then go for it.

Also, shoulda married into a wealthier family - very naive man for "following your heart". If you start with this gift you're never going to get away from the gifting. They'll be siphoning 10-20k a year until they die.

Quote from Iczer : Before anybody asks, we have made some mistakes financially. I make pretty good money. But with our mortgage, 2 car payments and credit card payments and soon to be my wife's school payment, we have our own debt to worry about. Now that my wife is working, we'll have extra cushion to put away for emergencies, along with pay off our debt. We have learned from our own mistakes and are working on fixing them. Needless to say, we do not have the cash to just loan her at the moment.

With three words, you can sum up the most common advice about lending money to your relatives: "Don't do it."
Giving money is a enabling behavior.
You can't be held responsible for their debts. Your parents' debts are their own.

I know it sucks but the most valuable thing you can give is advice and help her find a job.

Quote from Iczer : Long story short. My mother in law and her boyfriend have struggled for pretty much their whole life. They are ok with dead end jobs like working at Walmart and not moving up and living off minimum wage. So one day my mother in law got yelled at by one of her managers in front of customers and employees. This pissed her off, so she walked off the job and went home. She didn't even stay to put in a complaint or anything and she found out later that the manager was let go from the job. As I said before, they're constantly struggling and she has yet to find a job for about 2 months. She hasn't even looked hard and is now talking to my wife how she's going to be doing some bullshit website where she gets people to order products, hosts parties and make commission. I don't know all the details, but it's not the answer. So now they're struggling to pay bills. They can't pay their rent this month. My mother in law asked her other daughter to try and get a $1000 loan for them to pay some bills and have a little extra cash to get by. She was declined, so now my wife wants to try and get the loan for them. Am I the bad guy for not wanting to do this? We have always given a few hundred to them here and there when they need help, so we do help. But we have our own bills, my wife just started working after finishing school. We have credit card debt that we have a plan to pay off and now her school loan. Am I wrong for not wanting to to this? I do not have faith in my mother in law being able to pay it off. Just an FYI, my mother in law's boyfriend works at Walmart as well but is paying a lot of child support so he only gets like $500 paychecks. How can I get my wife to listen to me? It's hard for her to see her mom struggle and I understand that, but that would just put more added stress on us. She can't pay her bills now, so how would she pay us back for the loan? She already skips bills on holidays to buy presents and stuff. She would probably just skip more bills to pay us back. Sorry for the blabbering, I just got off the phone with her and she's really wanting to do this loan. Before anybody asks, we have made some mistakes financially. I make pretty good money. But with our mortgage, 2 car payments and credit card payments and soon to be my wife's school payment, we have our own debt to worry about. Now that my wife is working, we'll have extra cushion to put away for emergencies, along with pay off our debt. We have learned from our own mistakes and are working on fixing them. Needless to say, we do not have the cash to just loan her at the moment.

Never, ever loan someone in your family money. Ever. It is bad news. Personally, I wouldn't even give it to them. It doesn't make you cruel.

Quote from w3kn : From personal experience loaning money to anybody is a bad idea. Someone once told me: If you want to break a friendship, loan that person money. I should've listened.

x2.

i wouldn't mind going through the pretense of a loan. but anything given to friends/relatives is written off as a gift. if they pay you back, great.

Quote from w3kn : From personal experience loaning money to anybody is a bad idea. Someone once told me: If you want to break a friendship, loan that person money. I should've listened.

Quote from Iczer : I know and that's exactly what I told my wife. They struggle enough that she needs to suck it up and move on. She needs her paycheck. The main thing is my wife hates seeing her mom like this and wants to help.

Quote from w3kn : From personal experience loaning money to anybody is a bad idea. Someone once told me: If you want to break a friendship, loan that person money. I should've listened.

Don't you two get too anxious for more vec wisdom. That was my serious post for today.

Quote from Tacoma : If you start handling out money, you'll never see it again and they will keep coming back for more. You can't protect people from themselves. If you want to help them, give them advise and directions on how to get back on their feet and save money.

How do you give advice when they don't want to listen? They do stupid stuff with any extra money they get. Like tax returns, they take a chunk and go to a casino and stay for the weekend and gamble. They have a crappy truck that isn't reliable so they're currently borrowing my explorer which i'll need back in the winter.

Their problem is they live in a small town with little job opportunities. They need to move to a bigger town with more opportunities.

Quote from dudeofswim : With three words, you can sum up the most common advice about lending money to your relatives: "Don't do it." Giving money is a enabling behavior. You can't be held responsible for their debts. Your parents' debts are their own. I know it sucks.

Key words right there. From your account, she's already lazy and takes very little responsibility for herself. The only thing a "loan" (which is the incorrect term for it, as others have explained) will do is enable her to take less responsibility for herself.

EDIT: Also... DO NOT COSIGN!!!! FOR ANYTHING!!!