What to Do When Family Members Keep Borrowing Money: A Scientist's Perspective

[waht]

I borrowed a lot of money in the past to my five year older brother. a lot of it he hasn't been payed back because he is just so irresponsible. In fact he still owes me from 2005. Since then he bought a jet ski, new car, etc etc. Now that he has came back from vacation, some machine at work broke that needs to fixed ASAP or he will be in deep trouble. Knowing the thing broke often before, my brother hasn't made an effort to save for a reserve in case it breaks.

So he turns to me again for a few K loan. He promised it will be payed back soon, year right. But the thing is he understood that I said yes, so he went ahead with the repair. Now I'm faced with a choice whether to have a brother or not seeing him ever again. What would you do?

 

[WarPhalange]

He's five. Just take his lunch money.

 

[WarPhalange]

Serious answer: screw him. Borrowing money from family and not returning it is one of the lowest things he can do. Do you really want a brother who just leeches off of you? If he stops talking to you over this, it's a sign of him being a deadbeat and trying to pin the blame on you. You've already loaned him money and now he'll be mad if you don't do more?

 

[Moonbear]

If he needs the money for his work (his own business I guess?), direct him toward the nearest bank and explain what a business loan is.

I'd refuse to give him the money this time, especially if he's being completely irresponsible buying new toys instead of paying back his debts. Tell him selling the jet ski will help pay the bill. It sounds like he has ways to pay the bill if he's forced to do so if he has toys that can be sold.

Sometimes you have to get tough with a family member who wants to keep using you like that to avoid taking responsibility for their own actions. You don't have to leave him hanging out to dry, just refuse to be his personal banker. Instead, help him find the things to sell that will pay off the debt.

 

[LowlyPion]

Maybe make him give you the jet ski to keep in your garage until you get repaid. Take out a lien on his business or his machines. That you think he can't afford vacations as long as he owes you money. Tell him you resent his getting money from you and not making serious effort to repay. Any of the above or all. Basically anything you do to let him know your feelings is the likely best course long term. But being a silent fountain of loans will only insure that's the way it remains.

You'll always be brothers. And you may always help him. But it doesn't hurt to help him see his responsibilities too.

 

[waht]

Thanks for the answers.

The thing is he has nothing left to sell anymore. He can't sell the jet ski because doesn't have the title yet. A bank won't loan him a dime because his credit is so bad. Friends he used to borrow from are have other issues. He also borrowed from parents before and guess what, he hasn't payed back much either. So I'm the only life line. The thing is this is so serious that the only option he has is to put a bullet in the head.

 

[LowlyPion]

The thing is this is so serious that the only option he has is to put a bullet in the head.

Bankruptcy is a better course.

But enabling his problems with continual loans only makes them your problems and he has no reason to change.

 

[Evo]

Thanks for the answers.

The thing is he has nothing left to sell anymore. He can't sell the jet ski because doesn't have the title yet. A bank won't loan him a dime because his credit is so bad. Friends he used to borrow from are have other issues. He also borrowed from parents before and guess what, he hasn't payed back much either. So I'm the only life line. The thing is this is so serious that the only option he has is to put a bullet in the head.

Not your responsibility. Make him sell everything he owns. Doesn't matter that he still owes on the jet ski. Make him sell it and everything else he owns so that he feels the repercussions of his irresponsibility and how he is abusing you.

Does he own his business? As MB said, go to a lawyer and have him sign all of his assets over to you. It may be time for him to liquidate and/or file bankruptcy, and start over again.

If you give him money now, it won't be the last time, you know it. Unless you decide that you are going to financially support him for the rest of his life, you have to end it. If you decide to bail him out, make sure that you own everything, but take on no liability, and that he legally has to pay you back. Make getting the money so painful that he doesn't do it again.

 

[Moonbear]

Bankruptcy is a better course.

But enabling his problems with continual loans only makes them your problems and he has no reason to change.

Agreed. If he just got back from a vacation, then it's NOT to the point where he has no other recourse anyway. He somehow afforded his vacation. It's time for him to sit down and figure out a way to save up enough to pay off his existing debts and to stop incurring additional ones.

If the jet ski is still not paid off either, he still can sell it. Though, it likely won't help pay off other debts, he can get out from under that one. He could at least sell it for whatever he still owes on it. The bank can transfer the title to the new owner or new loan holder, however that works. He just has to let any buyer know that's the situation so they realize he won't have the title to hand over the day they pay. If he's not paying loans on things like jet skis, he can start using that money to pay off other debts.

It sounds like now IS the time to put your foot down and get him back to financial stability, because it WILL get worse, and he's still at a stage where he can get out of the mess with some hard work. Instead of taking vacation time, he should be taking a second job if he has a lot of outstanding debts too.

You're going to have to be tough with him, no way around it. You're not going to abandon him as a brother, you're just not going to let him dig himself into a deeper and deeper hole with no plans to ever get back out. Sit him down, find out exactly what he's earning each month, exactly what he owes in outstanding loans (including ones to you), work out a budget of what he needs to pay every month for essentials...rent, utilities, food, and figure out if he should be able to pay, or if he needs to find more income. Then help him figure out a plan of action. Does he need to move to a smaller home/apartment to reduce his rent/mortgage? Does he need to get a second job? Does he just need to stop buying frivolous things? Which debts need to get paid first? Get the higher interest rate things paid off first, and work down a list. If there are some low interest rate loans he can't pay off yet, just make minimum payments on them to keep his credit record free of delinquent payments, while making larger payments to pay off high interest rate ones, then once those are paid off, focus on the next set, and so on. Start making him track every penny he spends and report it back to you so you can help keep him on track.

 

[waht]

Good read guys, I think I know what I will do, but it's going to be tough.

The thing is we already tried tracking his expenses, even he suggested we do that and it didn't work in the end since he tends to choose instant gratification over more important stuff.

Every decision he ever made is a wreck. His business is now owned by his girlfriend, who is even more broke than him. He lost his house and lives with parents now. He has other loans that would make Bill Gates uneasy. I don't know how people can be like that.

Just thought that family should be number one priority.

 

[JasonRox]

I wouldn't lend him the money. No way.

If it was like $300, I couldn't careless. But a over a thousand?!

Dang!

 

[Moonbear]

Good read guys, I think I know what I will do, but it's going to be tough.

The thing is we already tried tracking his expenses, even he suggested we do that and it didn't work in the end since he tends to choose instant gratification over more important stuff.

That's usually the problem with people who can't save. They waste their money on "toys"...things they WANT NOW, not things the NEED later. It almost sounds like he still needs to be treated like a child, take away his debit and credit cards and hold his paycheck for him, then give him a weekly allowance for things like putting gas in the car, and make it clear if he runs out, he doesn't get more until the following week. He has to pay cash for everything, and that will keep him from spending money he doesn't have at least. But it's really pathetic that a grown man who owns a business is not able to do that for himself.

Every decision he ever made is a wreck. His business is now owned by his girlfriend, who is even more broke than him. He lost his house and lives with parents now. He has other loans that would make Bill Gates uneasy. I don't know how people can be like that.

Just thought that family should be number one priority.

Family should be, but it doesn't always work out that way. Obviously, he's not watching out for family nearly as much as you've been trying to watch out for him, and that has allowed him to get further and further into this mess. If he's living with your parents, then there is NO reason he can't be saving money now to repay debts. I'm sure that's part of the expectation of him living with them, that it will get him back on his feet.

Then again, I have some stepbrothers who were (still are) pretty pathetic about stuff like that. With one of them, it took having a step-sister drive him around behind an appliance store and suggest he choose a large refrigerator box, because that's where he'd be living if he didn't get his act together (she was fed up and ready to kick him out, and she was the last one he hadn't worn out his welcome with already). The thing is, it worked because things had gotten to the point where she really was dead serious and not just teasing him about it anymore.

 

[Leah]

I think you have some good advice from everyone. If it were me, I'd tell him to grow up. But I know how family means more than anything. Blood is thicker than water, or something like that. Tell him you care about him and see what he says. Is he willing to work things out? If not, then you must turn the other cheek, or ignore him. He's got bigger problems and you don't need to be around that. You'd think that he cares about you and your parents. I hope so.

 

[russ_watters]

And don't worry: it is impossible to get rid of such people, much less have them leave you on their own.