Should I let someone off a debt

We had a similar thing happen about 18 months ago. Our older son had a credit card debt and was paying quite a high rate of interest. I was able to transfer the balance to my credit card at a zero rate of interest for two years. Our son set up a standing order so that the balance would be cleared at the end of the two years. About nine months in his job disappeared in a reorganisation and after a three month period his salary went down considerably. He said he would pay as much as he could each month but DH and I knew it would be a struggle and a worry for him so we decided to pay the amount off ourselves for which he was very grateful. We have another son whose financial position is much better but even so we made a note of how much our other son had received and will make sure that he gets the same amount in various ways such as more generous sums of money on his and his wife’s birthdays, their anniversary and when they go on holiday. It wasn’t a huge sum, around £2000 but I suppose things might have been different if it was a larger sum which had tax implications.

I would make it easier for them by telling them to pay it back when they can, then leaving it at that. Then if others you know who need help find out your conscience is clear, in general don’t lend money you can’t afford to loose.

I actually think if a person borrows money they should pay it back. I have in the past when asked if I could lend my dd some money when the engine went on her car just offered to gift her the money as I knew with 2 small children, so high nursery fees, and was worried how she would get to work without s car. On other occasions I have let my son borrow money for car insurance and pay it back over 6 months. That way he can avoid paying the additional interest insurance companies charge for paying it off monthly. I knew my son had regular income and no committments so expected him to repay the loan in full, which he did. In your situation I think I would ask for s nominal payment to be made each month eg 20 percent of what was originally agreed, and reviewed every 6 months. I don't think I would just right it off if you want the money to help out others.

If you give away more than 3k in any one tax year, and it is traceable, via cheque, or as a lump sum withdrawal from a savings account, or even buy one of your family a new car for example, then you have to survive for a minimum of 7years from the date of the gifting otherwise it becomes taxable and chargeable to the recipient upon your death.

My late father gifted us some money when DH retired, but luckily managed to survive for the full 7years afterwards before he died.

If it’s one of your children, I would write it off , but make sure the others get the same .

after the recession of 2008 I loaned my son and his family a significant sum so that they would not lose their home ,really through no fault of their own. my son approached me about payment. as I am comfortable, have no outstanding debts of my own I considered it a gift.

Wow i could have written this post. We lent a substantial sum to son and wife who were seriously in debt. They started paying back but things happened andat the moment because of COVID and furlough they are struggling so not paying anything.
I would like to say forget it but like OP I have other children who could do with help which we cannot give at the moment. It’s a big worry for me and them.

I would suit them down for a conversation about it, explaining that you DO want the money back but that you'll give them some grace for say 6 months, at which point you'll be sitting them down again for a discussion regarding resuming repayments which may mean reinstating payments, be they back to what they were originally or at a reduced rate for another stated timescale.

I would say, family or not, if ever anyone gets into a situation of lending money you should put something in writing, stating the amount lent, timescales for repayment. You can always add subsequent changes into the written document. In addition, keep written (signed) records of all payments to keep everyone informed of the ongoing situation.

A written document, even handwritten, signed by both/all parties allows everyone to know what's been done and what the rules are. Even if you never think things will get to the point of going to court to enforce repayment, especially with family and friends, situations can change, you might have an emergency yourself where the funds are needed and your only answer is to go to court to get your money back, if this ever happened you'd need documentary evidence of the loan agreement and payments made so far, without it it's highly likely that the courts wouldn't do anything to help and even tell you it's not enforceable and the person owing the money could legitimately/legally walk away and never pay you another penny!

interesting. i have asked my adult children how they would feel and they don't have an issue with the money since they are doing well off. it is your money. in light of other siblings i would ask how they feel about it so as not to estrange them. estrangement is the worst experience you will ever feel so i would include their thoughts. there is always the chance that siblings talk amongst themselves so take that into consideration. you really are wanting to avoid someone getting upset with you for your generosity. believe me, its the weirdest thing ever right? to be x'd out because you are kind. it happens. so i would include some thoughts on what the other children might feel.

When I was in a similar situation, I knew that my elder sister would never be in a position to pay me back. So, instead of just writing it off, I then wrote off only what I would have given as a gift. ex: I would have given her roughly a $100 gift for her birthday, so I would say that amount is written off from the debt. Just another option to think about.

Thanks everyone.

Do whatever makes you happy. It's your money. My father in law(sorry don't know the abbreviation) would lend his 4 sons money and, as long as they tried to pay it back, he would draw a line under it when he felt they had honestly done their best. We never needed to borrow any but the offer was always there for which we were grateful. You know what they are able to do. X

If you can afford to let the debt go, I think you should. They obviously want to pay it back and it is hard for everyone at the moment. I am sure it would be a great relief for them not to have to worry about it anymore.

I think it would be a huge privilege to be able to lift the anxiety from a family member in this way.
When we were younger we were the very grateful recipients of such help.
We have tried to pay it forward when things became better for us.
Personally when I lend money to someone, I write it off mentally and then it is a pleasant surprise if I get it back.

I too have lent money to my son but never got it back. For my own sanity I have wiped the slate clean and told him we are back to square one, but no more handouts unless I decide it is a gift. Then I put by an equal amount for my other son for when he needs some financial help. They seem to plan better when they know I can't give them any more money. But as others have said make sure you are secure first because come the day when you need some financial help they might not be (able to be) so forthcoming and you may feel resentful.

Angeleyes58xx , your not alone my son did the same with me ... Broke my Heart into !!...

I agree withDaddima.
I have been in this situation with my step son.
Worked out fine in the end.

You sound like a lovely empathetic person, especially to look at every angle of this dilemma. Do what your gut is telling you to do, I have a feeling that you already know. There may be others that could benefit from this money, but you can’t help everybody, otherwise you could find yourself in financial dire straights.
As others have said, these people may be able to offer someone help in years to come, as you have shown.
Just try to keep your own counsel on this.
I hope everything works out for all involved.

I think it depends on the amount. If its hundreds ...maybe, if its thousands probably not. Also depends what the money was needed for.

I have helped out one of my children with money towards the deposit on a house. I am happy to adjust my will to make this part of his inheritance, but he insists that he pays the money back over the next 10 years. I have left it that if they find they are struggling them we can revert to plan A.

I had to let a debt go unpaid. The person involved pleaded poverty but always had a cupboard full of booze and went on holidays. It caused a rift in our friendship when she wanted a further large loan and I said no. She was very offended even though I didn’t bring up the matter of the first loan. We used to be close but not now. It still rankles . That’s what being taken for a mug does to relationships. Let it go but make it clear that you’re disappointed.

We lent my daughter a large sum of money when she got into financial difficulties after losing her job. She took out several pay day loans which put her house at risk and involved us getting a bank loan to clear them. My husband said he felt as if she was hanging by her fingers from a cliff and he had to rescue her. So he took over all her finances, set her a budget, opened a new bank account which he controlled. She spent time with him each week going through all the figures and gradually, slowly, he got her through it. It’s taken five years, during which she got a better job, has managed to pay off the loan and is on solid ground again. She has asked him to keep a separate bank account for her which she pays money into each month, but can only get at if she really needs extra and explains why. She was badly frightened, but has learned how to budget and keep on track - so far so good?

Just seen that it is sorted, very pleased for you.

I have helped out all my children, but have always given it as a gift. I think it would be too stressful for all of us to expect a return. But we are lucky to be in that position, I know.

Way back in 1976, when we bought our house as 18 & 20 yr olds, our mortgage company were keeping £500 back until we completed some work. My parents lent us the money and we paid something small back on a weekly basis. When we'd paid £400 they told us that was enough. We lent a significant sum to our daughter a few years ago. 3/4 of it has been paid back and I'm about to tell her that there's no need to pay any more. We've lent our son in the past and did the same with him. perhaps it'll depend on whether you can afford to write it off.