Should I let someone off a debt

I have a motto. Never lend money unless you can afford to lose it. People borrow because they are short of money, and chances are they'll never be able to repay you. Keep this arrangement quiet. It's no one's business except yours.

THIS IS RESOLVED

tanith - if anyone asks to borrow money the evidence is there that they are wanting to purchase something which is beyond their means. That should tell whoever is being asked to lend the money about the character of the person asking - s/he is a risk-taker. So the lender has to accept that s/he too is also taking a risk. You have taken a risk and on this occasion you have fallen foul of it because not only can the borrower not repay you but you also are having some emotional outcome as you start to see the wider picture - i.e. others in the family who might need financial help in the future. You have no choice but to accept the money will not come back to you in the near future. However, rather than write off the debt to make your relative feel better, I would talk seriously and explain that the money was what you considered to be 'available to support the family as and when needed. It would be interesting to hear the response and intention, and depending upon that to see whether you edge more towards simply forgetting it, or towards working out a repayment plan. I think what is also important is the feeling of the person who has borrowed the money - whilst it may not be possible to repay it right now, it might be important for him/her to know that s/he has discharged the debt in the future.

I really like the idea of letting them off the debt and asking them to "pay it forward" to someone else when they're back on their feet. Allows them to retain their pride whilst letting go of a great deal of stress, and you have the pleasure of imagining where your money might go in the future, perhaps long after you're gone!

I feel waiving the debt shows favouritism and actually sets a really bad example, especially if it is your child. I have seen this type of situation where the person was extremely grateful then continued their profligate ways. The parent, who worked really hard to build up their nest egg, was extremely distressed and it soured her feelings towards that child.

Harris27

If you can afford to let it go please do the worry of repaying you will come between you in the end. As I say the relief fir them will be enormous now. No one needs to know.

The issue has been resolved. Several times the op has said.

If you can afford to let it go please do the worry of repaying you will come between you in the end. As I say the relief fir them will be enormous now. No one needs to know.

Thanks Daddima

Oh my goodness how many people don’t read the thread. Poor OP keeps coming back to remind us it is all sorted and still posts appear with helpful(???) advice.

Daddima

THE MATTER IS RESOLVED!

Sorry Tanith I took too long to post!

How many will still answer, I wonder?

THE MATTER IS RESOLVED!

I think this thread should be allowed to drop now thankyou.

In 1989 my brother , sister and I went to South Africa to visit another sister. I arranged the flights as it was cheaper to do that in London. Brother paid his off straight away. Sister paid a little bit then stopped. She was getting on her feet having moved to London and I said ‘whenever you can’. Fast forward to end of 2020, I got a request from her for my bank details. She is now paying off the flight costs in fortnightly instalments as she is paid. My point is - yes, I was a bit miffed that she hadn’t paid at the time but I could afford it. I said it hadn’t bothered me over the years, we had a great time . It was my only holiday as an adult with some of my siblings. Thing is - it nagged her for thirty years! tanith Explain how you feel about the debt but give them a clear way forward. Like my sister, they may well surprise you at a future date. My sister was delighted when I told her the money was in my savings account. I wasn’t quite pension age last year!

Everyone will feel better now - you, tanith because you won't be wondering what to do, and the very relieved family member who would have liked to pay you back but can't. Sounds like an all round excellent result. I gave some money to a friend once; she was so obviously struggling but determined that she would give it back. We talked about it and agreed that when things looked up for her, she would 'pass it on' when and if she found someone else who needed it. It is suggested that if you gamble, buy stocks and shares or loan money, it must be with the understanding that you can afford never to see it again - or fret about it!

Letting it go is not fair on those you could have helped with the money, and may give rise to bad blood if the others find out. So, the best thing to do is ask for a nominal payment (a risible one, actually); and then you either put it aside for the others, or give it to them there and then. Not wanting them to worry is not the issue here - they borrowed the money; it was not a donation from the get-go.

I do a similar thing with my children and I keep a spreadsheet with their payments. My son had a few difficulties a few months back and we just put the payments on hold. I would do that and wait until they can start payments again, unless of course you can afford to let it go.

I can understand your reluctance to pursue repayment of the debt, especially when your family member's circumstances have changed. However, a debt is still a debt and as such, it should be repaid!
You have the option of negotiating reduced payments with your family member until such times as their circumstances improve, whenever that may be! If they refuse to consider that, it is clear that they have no intentions paying you back!
If that is the case, and if you have something in writing between the parties involved, stating that the loan has been made and the amount, then you have the option of pursuing your family member through the courts for repayment of the debt, plus interest and associated costs! If there is no written agreement however, it would be impossible to prove that the loan was ever made in the first place! I am sure this last resort is a route you wouldn't want to go down, as it is likely to permanently damage your relationship with your family member!
You sound a very kind and generous person! I grew up as an in a well-off household, had to work hard for every single penny I got, and only received anything when my mother died and left me money and her house in her will! I was told from an early age by my father that borrowing or asking for money was a bad thing! As a result, I never asked for or got anything from him, apart from the basics, but I learned to fend for myself from an early age.
You say you would like the money back so you can help other family members. Given that you are having problems getting money back from one family member, is it really wise to even consider lending to another? Money really is the root of all evil, and especially where families are concerned. Sorry to sound so mercenary, but I myself have been through a very hard time financially, forced to claim disability benefits just to survive, then labeled a benefit scrounger by my daughter and her partner for doing so! I worked in a Senior Nursing position for over 30 years before having to retire early on health grounds, so I am hardly a scrounger! Needless to say, I now keep my distance from my daughter!

Let it go. There could be no hope of you getting it repaid by what you say and could cause even more stress for you and family. Should circumstances change then who knows you may well be rewarded with some of the debt being paid back.

Debt rather than charity supports the recipient to retain their dignity. Family loans can be deferred indefinitely with no interest. That is bonus enough - dont leave them feel forever obliged to you by turning it into a gift/charitable donation.

Offer them a repayment scheme , until they are back on there feet . Even if it's 20 pounds a month . Something is better than nothing . As my mother use to say never be a lender or a borrower .

My mum lent us some money towards a car purchase. It was essential for getting to work. Initially we paid off a little every week but it became increasingly difficult and for a while I repaid nothing. Mum insisted that we should pay just a little bit, think it was only a pound at one point and into a separate bank account so that it was clear what was still owing. I felt better for doing this although initially a bit miffed!

If there are other members of the family who are in dire need, perhaps you could reduce the balance owed to you by this couple, say, by half and/or just take a small monthly payment until they are in a better position financially. In that way, you might still be in a position to offer assistance to others if you want to.

Disco dancer
I agree , we also tend not to lend money, preferring just to give it instead, easier all round. The exception was when our daughter needed to buy a car, we lent her the money with a direct debit repayment each month, rather than them taking out a commercial loan.

Thankyou for your kind posts everyone the matter is resolved to my satisfaction now.

I think that I might let them know that there is no rush for the money to be paid back to you and give them a break of at least a year and then see how things are with everybody.
I've just seen a comment about asking for a nominal amount each month and I do think that's a good way to go as well. Maybe they feel bad about not being able to pay the money back at the moment so a small amount could give them a feeling of doing what they can with what they have. It would have to be worked out with them as what some people call a small amount is not the same to others.