To pay back, or not to pay back?

brij2006 · October 2014

Okay, so H and I are doing Dave Ramsey's TMM. We are on baby step #2 and paying off debt, but instead are currently putting our snowball into savings to stockpile until after baby is here.

The next debt in our snowball is one of H's student loans that we will pay off after all of the medical bills are paid for. However, we were talking with BIL the other day and he reminded me that H has a small debt to MIL from almost 5 years ago when he was out of work for 9 months. I asked MIL about the amount of debt he owed her, and she said that she wasn't even sure how much it was. She thought it was something like $1,200-$1,600, but she isn't worried about getting paid back for it.

I've talked it over with H, because I personally don't want any debt owed to any family member at any time and I really want to just give her money for this debt and be done with it right now.

Here is his deal with the debt....

It was for car insurance that MIL paid for him for 2 out of the 9 months he was unemployed, and a homeowners insurance deductible when a storm zapped our central air unit while he was out of work. He thinks the total was $1,200 (she isn't sure what it was).

Now, BIL has lived with MIL forever. He's 25 now, has his own full time job, makes really good money, but spends it like it's going out of style. She has paid for his car insurance since he turned 16, and just 5 months ago he finally got onto his own plan. He doesn't buy groceries, doesn't pay for any utilities, and is constantly asking his mom for money because he simply chooses not to save. In May he got into a major car accident from driving drunk and went to the ER. His medical bills were $25k, and the cost of the lawyer for his DUI was $3k. MIL paid his $2k health insurance deductible and the $3k retainer for the lawyer with BIL's DUI.

This does not include the car insurance she has paid for him since he turned 18 (the deal was that they paid for their own once they turned 18, which H did), nor all of the other money BIL has mooched off of her.

So H has told his mom that he will pay her back when she quits loaning money to BIL and finally teaches him a lesson on his actions, and when BIL starts paying her back. She never once has talked about this money H owes her, and has commented that if we tried to pay her back then she would just spend it on the baby by buying us things we need for it off our registry. However, BIL throws it out constantly that H owes their mom money from 5 years ago.

Should I pursue this further? Tell MIL that H came up with the amount of $1,200 that he owes her, and give her the money and say his debt is done? Or should I leave it be and let H hold his ground with his mom about the money?

We know that MIL is never going to stop giving BIL money, but it's just difficult when it has easily been $20k over the past 7 years she's loaned him and then here we are trying to dig out of debt and make smart choices without any help. While she's enabling him and paying for his lawyer to try and get out of the DUI that he deserved (which he lost the case anyways so it was money wasted).

uncreatedsnow · October 2014

I would pay it and be done with it.

I think the BIL was a turd for bringing it up, and I think that what is going on between BIL and MIL is their business and should have no bearing on your DH and MIL's loan.

The peace of mind would be worth the $1,200-$1,600 to me.

formerlyGDaisy09 · October 2014

Money and Family is so tough. I would let your H work-out what he is comfortable with with your MIL and leave it at whatever they settle on. It sounds like your BIL has a lot of growing up to do...actually he sounds A LOT like my little bro (23, just starting year 5 of college, has no life plan, spends every penny he makes, and engages in risky behavior).

From what I know of my little brother, logical patterns of thinking do not happen. I have watch my parents bail him out of jail, hire lawyers, pay court fines, put gas in his car, pay for his car, and pay for another year of tuition. yet he doesn't seem to recognize all the "special" treatment he gets that my sister and I were never privy to (not that either one of us were ever at risk to need to get bailed out of jail). however he will still throw it in my face that I chose to go to an expensive school and, oh yea, mom and dad helped pay for my wedding.

His pattern of thinking is not logical, do your best to ignore it. in some twisted way he probably feels guilty about all the money he has cost your MIL and that if he can get your H to pay back the amount he borrowed than somehow your BIL will feel like he has done something for your MIL.

hoffse · October 2014

Well I would probably pay it if it were me. It's not a ton of money, and it's worth $1200 to me to feel like I've done what I'm supposed to do with regard to family obligations.

Once you pay MIL back it's her business what she does with it. If she turns around and drops $1200 on the baby, well then that's very nice of her and it ends up saving you money you probably would have spent anyway. So you're effectively coming out with a net $0 in that scenario. Even if she turns around and gives the $1200 to BIL, that's her business - but at least you and your H can feel good about holding up your end of the bargain, even if BIL has been irresponsible.

FWIW this situation happened in my dad's family years ago. My dad borrowed $8,000 for the downpayment on my parents' first house - he ran into a deal where he could assume a mortgage at a time when interest rates were through the roof. He paid it back as soon as he could afford it. I think it took them a couple years (early 80's). My uncle, on the other hand, borrowed over $50,000 for dental school and never paid it back. But my dad and his other siblings knew about it and sort of kept track of it. When my grandparents died the siblings informed the lawyer of the $50,000 outstanding debt - and it did get paid back at that time out of my uncle's share of the estate. Obviously this is not legal advice, it's just what happened in my family.

brij2006 · October 2014

@hoffse MIL has told us that the more BIL borrows, the less he gets when she passes away. She has a very steep nest egg and plans/wants to leave us with money after she passes. However, she has none of any of this in writing and there's no record of the full amounts either child has borrowed. Which is just making it a sticky mess, and I'm trying not to get too into the details because it's not my mom or brother.

hoffse · October 2014

brij2006 said:

@hoffse MIL has told us that the more BIL borrows, the less he gets when she passes away. She has a very steep nest egg and plans/wants to leave us with money after she passes. However, she has none of any of this in writing and there's no record of the full amounts either child has borrowed. Which is just making it a sticky mess, and I'm trying not to get too into the details because it's not my mom or brother.

Yeah I get that. Well that might be something your H should encourage his mom to do. If she wants you guys to get more money than BIL, she needs to preemptively plan for that to happen. That's a hard conversation to have, though, and it's probably best if you stay out of it as much as possible.

maple2 · October 2014

I think you should just ignore BIL completely when it comes to the question of repaying the debt. You and DH should talk about whether to accept the money as a gift or repay it. If my parents or DH's parents had loaned us money then later told us to consider it a gift that we did not need to pay back, we would thank them sincerely for the gift and everyone would move on. It sounds like that is what could happen between DH and his mother, but you have concerns about it still feeling like unpaid debt. Does MIL have personality traits that make you reluctant to accept generous gifts (like making your feel obligated or guilty)? You need to figure out what will be comfortable for both you and DH.

If BIL brings up the debt/gift, just ignore him. He is not involved in the transaction and should not be able to make you feel guilty. On the same side, though, your decision about whether to repay MIL should be made on the basis of whether it is the right choice for you, DH and MIL and be completely unrelated to whether she would spend it on herself, BIL or your LO.

Xstatic3333 · October 2014

I would pay her back-but-if she insists on you keeping it as a gift I wouldn't push too hard. If she wants you to use it for the baby maybe you could put it in a 529. Like PPs said, I'd leave BIL out of it completely. He sounds lovely (eye roll...)

jessica490 · October 2014

Xstatic3333 said:

I would pay her back-but-if she insists on you keeping it as a gift I wouldn't push too hard. If she wants you to use it for the baby maybe you could put it in a 529. Like PPs said, I'd leave BIL out of it completely. He sounds lovely (eye roll...)

This. I would pay it back just to be free and clear of this "debt". Then you can show your BIL what it really means to be responsible

But the 529 sounds like a good idea.

Erikan73 · October 2014

I think the issues with BIL are unrelated to the debt H owes his mom. What your MIL decides to do with her money is her call. You should pay the debt back. That being said, it will feel good that no one can hold over your head that debt wasn't paid back to MIL. Plus once you don't owe her the money, you can start telling BIL, we made good by mom, when are you going to stop being dependent so much on her.

I"m with other posters and if MIL insists on not accepting the money, invest the money for the baby and when it's time, you can tell them Grandma make the starting contribution to this fund for you. It will mean something to your baby when the time comes that they need the money.

CuriousKiddosMama · October 2014

I like the idea that some of the other posters have come up with- pay it back and say if you did want to spend this on the grand baby, we would love it if you were to start a college fund. We appreciate the gifts for lo, but feel like college is more important long run and that this money would have so much time to grow- or something to that extent.

KTdidit · October 2014

I would stay out of it and let your DH handle it. The money wasn't loaned to you as a couple, it was loaned to him before you came around. It's his family and his issue, not yours.

Sisugal · October 2014

MIL loaned the money to DH- pay it back. The other issues are not part of this. And please do not tell her how to use her money. - it is HER MONEY to spend wisely or stupidly.

brij2006 · October 2014

Sisugal said:

MIL loaned the money to DH- pay it back. The other issues are not part of this. And please do not tell her how to use her money. - it is HER MONEY to spend wisely or stupidly.

Oh, we would most definitely not be telling her what to do with the money. That is her choice and decision.

H is just all hurt over it because she's made comments that she isn't worried about it, forgets he owes her money, and would just buy the baby something anyways (3 years ago it was that she would put it toward our wedding gift). He's just to the point that she needs to say whether or not she feels this was a gift and tell him that the debt is forgiven. Instead of just hinting at it and making us both confused.

als1982 · October 2014

I'd pay her back ASAP. And the condition that your H put on not paying her back until she stops supporting your BIL is just out and out wrong. He owes her money, and it isn't appropriate for him to place conditions on the payback. She's an adult. Let her spend her money as she chooses.

Sisugal · October 2014

Your DH will feel better about himself if he just pays the debt. Forget everything else. He can be a man of character who takes care of his debts or a person who tries to weasel out of them.

lifeonthehill · October 2014

I would pay her back. If she chooses to get LO presents with it that fantastic! If she chooses to loan it to childish BIL then that sucks but it is her choice.

I couldn't owe money like that. I have never borrowed from family and I hope we never have to. I felt guilty enough owing ginormus companies money for H's SL debt.

brij2006 · October 2014

alyssa32713 said:
I couldn't owe money like that. I have never borrowed from family and I hope we never have to. I felt guilty enough owing ginormus companies money for H's SL debt.

Ugh, that's how I feel too. Before we got married I told him that he needed to get this debt settled with his mom. Of course that never happened, and I didn't want to push the subject because I was walking into the marriage with $45k in student loan debt while he only had about $15k.

At this point I just want to write his mom a check and tell her that we've made good on his debt and it is no longer a discussion (even though it's never been an issue with her, but has been with BIL).

I've only borrowed money from my parents once. We both kept track of the amounts while I was in college, and after I graduated we set up a payment plan for me to pay them back. I graduated 1 month before Christmas, and my Christmas gift was a card with the 1 $300 payment I had made to them and the payment plan and list of money I had borrowed. They told me to tear it up and have a Merry Christmas, my debt to them was a gift and I was paid in full to them.
It was a wonderful gift, but I borrowed that money throughout college so I didn't have to borrow as much in student loans and had planned from the start that I would only borrow what I truly needed and we would both keep track and they would get paid back.

Obviously that wasn't the case with H and his mom.

brij2006 · October 2014

Erikan73 said:

I think the issues with BIL are unrelated to the debt H owes his mom. What your MIL decides to do with her money is her call. You should pay the debt back. That being said, it will feel good that no one can hold over your head that debt wasn't paid back to MIL. Plus once you don't owe her the money, you can start telling BIL, we made good by mom, when are you going to stop being dependent so much on her.

I"m with other posters and if MIL insists on not accepting the money, invest the money for the baby and when it's time, you can tell them Grandma make the starting contribution to this fund for you. It will mean something to your baby when the time comes that they need the money.

I really like this aspect of it, and maybe that's something I will point out to H. Once his debt is paid to his mom, then his brother can say absolutely nothing about it. His brother looks up to him, and maybe this would show him that he makes his debts right and BIL should do the same.

At this point I need to find a way to convince H that this debt just needs to be done. It's gone on for far too long and there's absolutely no reason why it shouldn't have been paid back years ago.

To pay back, or not to pay back?

Re: To pay back, or not to pay back?

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