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  1. #1
    Join Date
    Dec 2008
    Posts
    3

    Unhappy Loan to a Family Member

    Hello, I have a question regarding loaning money to a family member.

    Basically, I got some money when my father passed away. A few months later, my stepfather, whose business had suffering post-911, asked if he could borrow $20k, advising that he planned to pay it back in a few weeks. I said yes, and easily wrote him a check for the money. I believed him when he said he would pay me back, and at the time, the money was sitting in my account not being used, and here was someone who needed it. A week later, he asked to borrow another $11k, again saying he would pay me back in a month. I gave it to him, no questions asked.

    This was in May 2005. I have not received a dime from him. His business, which he was using my money to try and save, ended up going bankrupt. He owes the IRS a lot of money and we lost our house. I moved into an apartment and he never mentioned the money. I recently got married and the rest of the money I received when my father passed away is gone. The $31k my stepfather owes me would make a nice downpayment on a home, or a cushion to use when I have children.

    I don't ever ask about the money, because I am mostly embarrassed for him, as he lost his business and I know he doesn't really have the money. He is 62 years old and working under the table doing home improvement and painting with my uncle and I know he makes decent money. I have no idea what my recourse is to ever get this money back. I did not ask him to sign anything when he borrowed it. Am I SOL or do I have options?

    Thanks for any advice!

  2. #2
    Join Date
    Nov 2008
    Location
    Current Missouri 3yrs/ California 40yrs
    Posts
    50

    Default Re: Loan to a family member

    You can take step dad to court for the money. Time is not on your side, find out time restrictions on filing a suite against step dad. I have questions for you, and maybe you can see some answers in the questions. I understand the money was a loan. The loan was given to a step family member, which sounds like you cared for very much. Taking your step dad to court and sueing him for the money owed you, will it tare the family picture apart? Money is hard to come by, but so is family. If you can't ask him about it, and maybe come up with ideals for repay of loan, then small claims court could be the answer, but if you care for this person still, then have a sit down, and talk about it. First rule is never go into buisness with family, or loan money to family. It's a little late for that now. How much is family worth? Without any paperwork on the loan, cashed checks is all you have to prove your case. It sounds like he make good money now, but how long will it take for you to save from his payments the amount loaned? Hope you decide to do the right thing, and good luck whatever avenue you take.

  3. #3
    Join Date
    Dec 2008
    Posts
    3

    Default Re: Loan to a family member

    Thank you for your response. You are completely correct in that pursuing this money would probably open wounds in my family, however there are some already. My mom and stepfather at odds over his losing his business and she is very bitter of his dishonesty and taking money from me that he wasn't able to pay back. Probably more bitter than I am. So my family already has a rift in it, this would probably make things worse. I don't know that I have it in my to take him to court, but I did want to know what my options were. We are currently not speaking, we have had a tumultuous relationship my entire life, and right now, the money is in the forefront of my thoughts because we aren't speaking. I really don't know what to do right now, but I do feel like I'm going to have bitter feelings regarding this for the rest of my life and I wish I knew how to fix everything. Thank you for your advice.

  4. #4
    Join Date
    Nov 2008
    Location
    Bloomfield, New Jersey
    Posts
    21

    Default Re: Loan to a family member

    Your options are very limited.

    First, you made a unsecured loan. There was no promissory note nor was there any collateral attached.

    Second, he filed for bankruptcy. Technically speaking had he listed that $31k in the filings, you should have received notice from the US Bankruptcy Trustee informing you of the filing and your rights. I'm assuming you never received such notice, which will still allow you to deal with this. Had you received notice, you fall in the back of the line, after secured lenders.

    Third, the whole family dynamics of this is limiting your options. You can try to speak with him and see what his intentions are but if you are not going to (1) follow up on investigating what happened at bankruptcy; or (2) pursue this with a civil action (is statute of limitations permit), you might as well suck it up and take it as a lesson learned. Unless he's such a scumbag, I'm sure he thinks about it as well and will someday try to make amends.

    Good luck.

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