Wow so many stories!
This BIL runs his own business, and lost a big contract (that’s why the sudden need). He has a plan to grow the business again, hence his thought that it would be short term.
BUT he has a long history of living above his means. He used to ask his dad for money, and for the past 6 years or so I think has lived off the money he got when his parents died. He doesn’t seem to have a cushion for his business ups and downs. His 2nd wife seems responsible and works, but his teenage kids don’t.
I agree $500 is almost nothing, but was hoping it might be a soft no. We are going to ask him how much precisely he needs.
How much does he want to borrow?
Then he needs to cut his spending UNTIL he gets that additional income.
If he was such a wonderful financial risk…he would be able to get a loan from a bank or credit union. Right?
ETA…if he had such terrific potential to earn more…he should already have done so.
BIL (smart guy but never took advantage of Veterans education benefits and has been under/unemployed for years) asked H for $13K “for repairs to both cars”. H wired it to him (our cars were 11 and 12 years old at the time, and we had been saving to replace one).
A couple months later, we were cleaning out MIL & FIL’s home after they moved to assisted living. SIL showed up, said “this is the worst day of my life”, and asked us to leave. Turns out their home had been foreclosed on and they were moving into to MIL/FIL’s house. They are still there four years later. When/if the money for MIL/FIL care runs out, H as POA is going to have to sell that house.
Needless to say, we’ve never seen any repayment. They never initiate contact with us or MIL/FIL (not even a birthday card) and rarely reply to emails inviting them to Thanksgiving or to get together when H is in their town on business.
My DH offered this very thing to his bro decades ago, (the fiscal mismanagement and living above his means has been a lifelong issue for the brother). Brother was incensed and highly offended. Needless to say he declined the offer ans wanted money instead. He continued to take it from his father, who was a soft touch and continued to bail him out of his financial woes. Well, Fa passed away and the inheritance is now burned through, from what we can tell (BIL wont disclose his finances- just wants family to give him $). Um NO.
OP- I wouldnt ask how much he needs, as its irrelevant and just feeds the problem. Say no. You have other plans for your hard earned/carefully invested money.
I have a sibling who overspends…though god knows what she buys! When one of her appliances died…and she definitely needed a replacement…we siblings bought her a new applicance of OUR choice (because she has a tendency to pick top of the line things she doesn’t need…and can’t afford). We arranged for delivery, and removal of the old thing.
No money was given to this sibling…and never will be.
@jym626 yep that’s my BIL.
When my dad was having some temporary cashflow issues (we had already refinanced his house for him and were in the process of getting his long term care to initiate payments) we asked my bro, who never ever lifted a finger to help with dad, if he would help with a temporary contribution (loan) to dad, which we/he would repay as soon as the LTC policy started payments (it was almost done- would maybe have been a month at most). Bro demanded to see a full accounting of all of dad’s finances and assets (and there was a very good reason that dad had excluded him from all of this and I was handling everything… for years) with no guarantee that he’d even consider helping, even temporarily. We (DH and I) had been paying for things/repairs, etc and flew up frequently and took care of all the case managers and caregivers, and bill pay and taxes… you name it, for years. So we asked my bro once, if he would help. Nope. So we took care of it from our own pocket, as usual, and then rectified it when the LTC started.
Point is, if you wanted to, you could ask for an accounting of his finances. To me its tacky, but that might stop the request for $.
@jym626 does make a good point.
If your BIL has even more debt than he is disclosing to you…you could be throwing good money after bad. In other words…he could lose his house anyway…or whatever.
Sometimes someone dies and the balance is thrown off. I have a friend who has a brother who mooches off their Mom. She also has 3 other sisters. One sister is with her, one is with the moocher, and the third just turns a blind eye and writes the checks.
When their Dad died, suddenly the brother was borrowing all sorts of money from Mom. He got her out of her house and into independent living so he could live in the house. (The siblings all own 1/10 of the house after their Dad died) The “turn a blind eye” sister was paying his utilities and house expenses from the Mom’s account, with her blessing. This man has a full time job with good benefits, he’s just a greedy a$$!
Now, he’s getting married again and moving into his new wife’s house. The old house will be sold. My friend wants to give her mother the money from her 1/10 share but I told her to hold it for her mother. You know Mom is just going to hand it over to mooching brother as soon as he asks. There are too many enablers out there.
Jym has a great point. Any potential lender will ask him for at least a couple of years of tax returns and much more, and so should you.
My bil claims he wants the $ to fix up his house so it will have a higher value and he can refinance (yes I know the flaw in that thinking) but in the meantime he has some, but not enough, income from his pension, but credit card debt out the Ying Yang with extraordinarily high interest rates. Stupid stupid stupid. And no one in that house currently is employed. As my husband says they are chasing unicorns.
Sounds like this is this is the story of your BIL’s life. If it were a one time issue (big medical bills, totaled car, etc) I might consider, but it does not sound like it. If you decide to do it, I agree with someone else who mentioned paying the money owed directly to bank holding mortgage. Or to the ex owed child support. I lent money several times to my Mother, which she never repaid. She repeatedly told us, "when she gets her next check, when she gets her tax return,’ etc. My H & I did request she see a financial counselor once, which she did but then insisted to us that was why her credit was so bad. After some period in ti me I just resigned myself to knowing I would never get it back. And in the end, she cut me out of her will and I got nothing there either. ha!
We don’t ‘loan’ any money that we cannot afford to give as a gift.
@ohiopublic your situation is a little different. The OP has an able bodied adult brother who is spending, and appears to have always spent…well beyond his means. That is NOT your situation.
If I had a disabled relative, I would try to work with them to establish a budget, make sure they were connected to appropriate social services agencies in their area…and help them out if need be.
We have not asked him how much he needs. If we are sure we are saying no, that just leads him on. We are still debating (H and I do not tend to make financial decisions quickly–part of the reason we’ve saved well is we just don’t get around to spending!)
With my parents, I offered to pay a specific bill, like the rent or a medical co-pay, so long as they provided me with the information to make the payment directly to the provider. That is because I once gave them money to pay a bill and they sent the money to my sister. I was okay with paying some bills for me parents, but absolutely refused to give money to my sister. I knew they they would take any money they had saved from me paying a bill and send it to my sister, but that wasn’t me giving her money directly. Interestingly, my parents never took me up on the offer after that.
We borrowed money from MIL 20 years ago to cover the down payment on our current house and we repaid her when our prior house sale closed. Now, they situation is reversed. We are trying to downsize MIL and move her closer to us. I am going to pay the down payment on her new place and reimburse myself out of the proceeds from her house sale. OTOH, I wouldn’t loan/give my sister-in-law $1 because she would use it for drugs or alcohol.
In general, I would not loan money to a family member or friend. I have made one exception - I loaned some of my inheritance to a client of H’s in an arms’ length transaction at 8% interest. There is a written, legally enforceable agreement.
When I was growing up, my mother had a saying on the topic of giving loans: “I’m not a bank”. (I don’t know that anyone ever asked her for a loan, but she was ready with her answer if they did!)
My H and I don’t lend money, but we do give it, under certain circumstances, and never more than we can afford. I don’t want anyone in debt to me. I don’t want the change in relationship that results, don’t want the resentment that I know I’d feel if /when the loan wasn’t repaid. It’s just “cleaner” for me this way, for want of a better term, and it’s what we’ve taught our daughter.
Your problem’s been weighing on me because I had a similar problem in my 1st marriage, and it ended up causing a problem between my then-husband and me (marriage was doomed anyway, but extra issue didn’t help). For us, it was $10,000 to a “best friend” whose business also lost a customer but he had another one lined up and ready to commit, and just needed this short term loan. Of course the business ended up going belly-up anyway, the “friend’s” dependable wife with a good job divorced him, and the “friend” disappeared from H’s life. Your H sounds like a good guy who loves his brother and feels a sense of duty to look out for him. You want to make sure both you and your H can feel good about whatever decision you both decide, and that it won’t eat away at either of you.
I think the problem here isn’t so much the $500, but the fear that this could lead to requests for more and more money, and where does it end. Your comment that your BIL owns his own business is a big concern for me.
One way I could see this going is your husband sitting down with his brother and saying that he loves him and wants to help out, but that he won’t EVER loan him money because it will stand in the way. Instead, he will give him this $500 this ONE TIME to tie him over, but that he won’t be able to do any more in the future because he has obligations to his own family, including his children who he’s had to tell no to for certain colleges because of money. Personally, I doubt this $500 will help your BIL in any meaningful way, and I’d be a little concerned that your BIL know that this is just for this one time, period. I also think that in some circumstances this One Time rule can be a little hard to maintain (if someone is sick, etc), and I don’t think it really helps solve anything.
Another way I could see this going is your husband sitting down with his brother and saying that he’s really worried about him, and he doesn’t think a one time loan of $500 is going to do it. After all, being behind in child support and mortgage payments is a lot more than a $500 issue. Your H could say that he doesn’t want to get all into his brother’s financial affairs, but by asking for a loan, he (your BIL) made it his (your H’s) concern too. When you own your own business, you need to have a cash cushion because things always come up. I understand he lost that one client, so that was unexpected, but things always happen and that’s why businesses have lines of credit. Now that he’s in a short-fall situation, I’m sure he’s not in a position to qualify for a line of credit if he doesn’t already have one. If he has one, and it’s used up, that’s a really bad sign for his business. Your BIL needs some breathing room (and $500 isn’t going to do it), so what about your BIL contacting the bank that holds the mortgage on his house and work out an agreement where he doesn’t have to pay several months of mortgage payments, and those payments can be added on to the back of the mortgage obligation or made-up some time in the future. Some worries I have for your BIL is that if he is so short on money, he could be making some really dumb moves, such as not paying his income taxes on time, or worse, not paying over the income taxes he collects on behalf of any employees (that’s a crime), or not paying his employees (even if he owns his business as a company, he still has personal liability for paying his workers). I really like the idea another poster had about offering to pay for a financial consultant.
If your BIL objects to this second way, then your H and you can still feel good that you offered to help in a very meaningful way, and that your BIL wasn’t open to accepting your help at that time. You and your H can also feel good that you saved that $500 for you to give to him at a later time if/when his business collapses, he loses his house, and he is really in a bind.
@ohiopublic, have you looked into him applying for SSDI if physical/mental health issues don’t allow him to work? Is his wife employed?