Author Topic: In-law financial screw ups - Advice?  (Read 6789 times)

jeanjo87

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In-law financial screw ups - Advice?
« on: May 12, 2014, 01:43:43 PM »
Hi everyone -

Hoping I can get some advice on how to not face-punch my in laws...

When my husband was young and dumb, he took out a private loan for his first year of college at Big State School.  My in laws told the 18 year old to "figure it out" and gave no guidance. Fast forward 7 years later - loan can no longer be deferred.  Husband is still in school.  In laws informed us that they will pay the loan (they did the same for his brother).  Fine.  We go about our business none the wiser, until a week ago when we got a bill from a collections agency in the mail.  Apparently a) in laws have only been making minimum payments of 189.99/month on a 26k loan w/4.65% interest and b) they periodically forget to pay the loan on time.

So this creates an awkward situation. I want to inform the in laws that we will be taking over the loan, as they have proved themselves irresponsible and I no longer trust them to do what they said.  I want all future loan documentation and information to come to us (currently goes to in laws).  Husband wants to just pay the loan quietly and not discuss it with them.  Problem is, I don't see how they won't know, since they receive all the documentation.  We planned on eventually dealing with the loan ourselves anyway, but the timing isn't great, since we're both finishing school. We're both extremely angry/disappointed, but sadly not surprised. Does anyone have any advice when it comes to dealing with financially irresponsible in laws?  How do I keep my cool when the subject comes up? How do I gently explain to not healthy 65 year olds that at the current payment rate, they're probably going to be dead before the loan is finished?

CommonCents

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Re: In-law financial screw ups - Advice?
« Reply #1 on: May 12, 2014, 01:50:00 PM »
I think the better way to explain it is to thank them for the payments they've already made, and tell them that you are able/prepared to assume them now.  It sucks they weren't clear on what they'd pay for, but, otoh, it was for your husband's schooling which is his responsibility to pay (and to understand what happens with deferral is that it generally gets larger in the meantime).

MDM

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Re: In-law financial screw ups - Advice?
« Reply #2 on: May 12, 2014, 01:51:51 PM »
+1

And let your husband do the talking, so you can smile while biting your tongue.

CheapskateWife

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Re: In-law financial screw ups - Advice?
« Reply #3 on: May 12, 2014, 01:53:58 PM »
I might suggest a completely different approach and way of thinking about this.  And based on the way you have framed this question, I can see you might not like my response, but here goes.

Deep breath...

First:  Your husband's education is his own responsibility.  Your husband's debt is his own responsibility.  You married him, and now its yours.
Second:  Clearly, they made a commitment they don't have the capacity to follow through with.  Time for you and DH to take it over or file for bankrupcy.  Your 65yr old inlaws clearly need to preserve their wealth for their own future.  Period.

They don't owe your husband anything as he is obviously a grown (deleted for civility) man who is old/mature enough to get married and spend 7 years at a university.  So instead of eventually dealing with the loan, deal with it now.

MooseOutFront

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Re: In-law financial screw ups - Advice?
« Reply #4 on: May 12, 2014, 01:59:08 PM »
Yup.  This is unfortunate, but the correct choice is to have your husband tell his parents thank you for what they have done up to this point, but that you guys are ready to assume responsibility for the loan effective immediately. 

greenmimama

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Re: In-law financial screw ups - Advice?
« Reply #5 on: May 12, 2014, 01:59:47 PM »
I might suggest a completely different approach and way of thinking about this.  And based on the way you have framed this question, I can see you might not like my response, but here goes.

Deep breath...

First:  Your husband's education is his own responsibility.  Your husband's debt is his own responsibility.  You married him, and now its yours.
Second:  Clearly, they made a commitment they don't have the capacity to follow through with.  Time for you and DH to take it over or file for bankrupcy.  Your 65yr old inlaws clearly need to preserve their wealth for their own future.  Period.

They don't owe your husband anything as he is obviously a grown (deleted for civility) man who is old/mature enough to get married and spend 7 years at a university.  So instead of eventually dealing with the loan, deal with it now.

Student loans are not bankrupt able

jeanjo87

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Re: In-law financial screw ups - Advice?
« Reply #6 on: May 12, 2014, 02:11:05 PM »
+1

And let your husband do the talking, so you can smile while biting your tongue.

Thanks everyone. 

I had to chuckle at that. Will definitely be biting the tongue.  The toughest part is that his parents are going to see us paying the loan as an insult - that we want them out of our lives etc, when it really comes down to we don't trust them with money. We both agree that he's on the hook for his own education, and that we're grown-ass people who can afford to pay the loan and let his parents be happily retired. I think we're going to go with the "we would be happy to let you continue to contribute to the debt payments, but we're going to pay also so we can get rid of it faster,"  and not mention the collection agency.   We'll see them in person in a few weeks, and I'm sure it will come up.  As long as my father in law doesn't pitch a public temper tantrum, I'm going to call it a win.  I have low expectations...

lazysundays

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Re: In-law financial screw ups - Advice?
« Reply #7 on: May 12, 2014, 02:12:03 PM »
Where does this entitlement come from?  I took out my SL, with no parental involvement, and I am paying them off.   I did this while dh and I were dating, so he knew the situation. It is our debt. You might feel they owe you because they helped the sibling, but if either of the children took out too much loan and overburdened the parents, then no more $. Sorry kiddo we didn't expect so much SL debt and we are tapped out.  Just to make this clear, I took out $188,000 in SL and it was worth it and I don't regret it or burden others with it.

Cpa Cat

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Re: In-law financial screw ups - Advice?
« Reply #8 on: May 12, 2014, 02:14:45 PM »
You should be able to set up an online account without too much information. Then just start paying it. If the in laws pay it once in awhile too, then great, it gets paid off faster.

If it's truly not doable for you right now, set up the account and monitor whether payments are being made. If timely payments aren't made, then you make a payment.

Will they find out? Yes. Or, if you want, you can probably just change the address online too.

Have a conversation or don't. If you really can't afford the loan, then clearly you need to have a conversation of some sort. Tell them that you want to start paying the loan, but need them to contribute X amount (whatever your shortfall would be). Then ask them to contribute it to you directly, since it will be simpler for you to just make one payment.

Personally, I'd do what I could to just straight up make the payments without their involvement - because you can't really count on them.

If you do have a conversation, that conversation doesn't have to involve any discussion of late payments or flakiness. Just, "We're going to start auto-debiting this. We appreciate any additional contributions you want to make, because it will be a big help in getting the balance down, but you're not under any obligation."

Frankies Girl

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Re: In-law financial screw ups - Advice?
« Reply #9 on: May 12, 2014, 02:17:09 PM »
If anyone needs a facepunch, it's your husband. He is not a child. He should have kept tabs on his debt and he should have taken it over the first time the inlaws missed a payment. So no only did he continue acting the ostrich as far as what his debts were doing, he's probably racked up even more and he has dumped an innocent bystander (that would be you) into a mess that will have an adverse effect on both of your credit histories.

Your husband needs to grow the hell up and tell his parents thank you for what they did pay for, but he will now be taking over the payments since he's an adult now.

Honestly, this sort of hits me the wrong way that he's too chicken to have a basic conversation with his parents to tell them this himself, and just wants to skulk around like a child. He's old enough to have gone to school and get married, so time to start acting like an adult and take care of his responsibilities. (something like this happened to me in the early days of my own marriage, but it was a car loan situation... soooo much fun to figure out that mess)

And yes, it sucks that his parents said they'd take care of it and then did a crappy job of it. Not a damned thing you can do that won't make your relationship with your inlaws worse as far as calling them on it. Don't go there. Just appreciate that they did anything and step up and take responsibility now.

And I do hope that his 7+ year college degree is going to be worth the effort and expense.


kmm

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Re: In-law financial screw ups - Advice?
« Reply #10 on: May 12, 2014, 02:20:47 PM »
If anyone needs a facepunch, it's your husband. He is not a child. He should have kept tabs on his debt and he should have taken it over the first time the inlaws missed a payment. So no only did he continue acting the ostrich as far as what his debts were doing, he's probably racked up even more and he has dumped an innocent bystander (that would be you) into a mess that will have an adverse effect on both of your credit histories.

Your husband needs to grow the hell up and tell his parents thank you for what they did pay for, but he will now be taking over the payments since he's an adult now.

Honestly, this sort of hits me the wrong way that he's too chicken to have a basic conversation with his parents to tell them this himself, and just wants to skulk around like a child. He's old enough to have gone to school and get married, so time to start acting like an adult and take care of his responsibilities. (something like this happened to me in the early days of my own marriage, but it was a car loan situation... soooo much fun to figure out that mess)

And yes, it sucks that his parents said they'd take care of it and then did a crappy job of it. Not a damned thing you can do that won't make your relationship with your inlaws worse as far as calling them on it. Don't go there. Just appreciate that they did anything and step up and take responsibility now.

And I do hope that his 7+ year college degree is going to be worth the effort and expense.

+1. I don't see where the in-laws deserve face punches. It would have been nice if they had efficiently paid off their son's loan, but it is, after all, HIS loan.

Frankies Girl

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Re: In-law financial screw ups - Advice?
« Reply #11 on: May 12, 2014, 02:23:49 PM »
and after seeing your latest response...

Well, your inlaws getting insulted is all on them. What is the worst that could happen? They throw a hissy fit that their adult child and his wife want to be responsible?

As long as y'all go into this conversation as "hey, just wanted to let you know, we're finally in a really good place and one of the big things we want to do is start taking on that school loan! We're so excited to get that sucker paid off as fast as possible, and just wanted to thank you for keeping up with it all these years."

And then don't see any of the tantrum stuff as an opening to fight. If they get offended, act confused. "I'm sorry, not sure why you're upset? We thought you'd be thrilled. This isn't about hurting you; you should be so proud that husband's name is doing so well thanks to your help. "

and then change the subject to something nice to distract.

(I've got absolutely insane family and inlaws, so I've got LOTS of experience on dealing with irrational behavior, unfortunately)


jeanjo87

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Re: In-law financial screw ups - Advice?
« Reply #12 on: May 12, 2014, 02:41:54 PM »
Where does this entitlement come from?  I took out my SL, with no parental involvement, and I am paying them off.   I did this while dh and I were dating, so he knew the situation. It is our debt. You might feel they owe you because they helped the sibling, but if either of the children took out too much loan and overburdened the parents, then no more $. Sorry kiddo we didn't expect so much SL debt and we are tapped out.  Just to make this clear, I took out $188,000 in SL and it was worth it and I don't regret it or burden others with it.

Just want to make clear - Husband took out the loan in the midst of dealing with severe depression, at 17 years old.  He and I both agree it's his responsibility, and I was well aware of it at the time and before we were married.  He came home after the one year, got treatment, then worked/went to community college before marrying me and transferring to his current school.  He and I have since paid for his remaining education by alternating work/school semesters.  I'm employed full time in a field that doesn't pay a lot (~28k/year), but does pay for my graduate school.  We are both due to graduate in December, him w/a B.S. in ChemE and me w/an MPH.  The original plan was always to take the loan over from his parents once he graduated.  They owe us nothing, and we are well aware that they have been generous.  The problem was that we were told they would take care of this on repeated occasions, and then suddenly *BAM* we find out they aren't doing what they said they would. 

MooseOutFront

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Re: In-law financial screw ups - Advice?
« Reply #13 on: May 12, 2014, 02:44:42 PM »
You guys sound awesome and I didn't get the slightest impression of entitlement from you even before the elaboration.  If my parents said they were paying for my student loan then I would by gawd let them pay for my student loan. 

EDIT: until something like this happened, at which point I would take it over immediately.

Frankies Girl

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Re: In-law financial screw ups - Advice?
« Reply #14 on: May 12, 2014, 02:48:48 PM »
Where does this entitlement come from?  I took out my SL, with no parental involvement, and I am paying them off.   I did this while dh and I were dating, so he knew the situation. It is our debt. You might feel they owe you because they helped the sibling, but if either of the children took out too much loan and overburdened the parents, then no more $. Sorry kiddo we didn't expect so much SL debt and we are tapped out.  Just to make this clear, I took out $188,000 in SL and it was worth it and I don't regret it or burden others with it.

Just want to make clear - Husband took out the loan in the midst of dealing with severe depression, at 17 years old.  He and I both agree it's his responsibility, and I was well aware of it at the time and before we were married.  He came home after the one year, got treatment, then worked/went to community college before marrying me and transferring to his current school.  He and I have since paid for his remaining education by alternating work/school semesters.  I'm employed full time in a field that doesn't pay a lot (~28k/year), but does pay for my graduate school.  We are both due to graduate in December, him w/a B.S. in ChemE and me w/an MPH.  The original plan was always to take the loan over from his parents once he graduated.  They owe us nothing, and we are well aware that they have been generous.  The problem was that we were told they would take care of this on repeated occasions, and then suddenly *BAM* we find out they aren't doing what they said they would.

Sounds like y'all are on the right track then. So sorry that he trusted his folks to do what they said they'd do, but hopefully he can just have a nice casual conversation and you can take that loan back without any worries.

good luck!

« Last Edit: May 12, 2014, 03:02:32 PM by Frankies Girl »

HairyUpperLip

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Re: In-law financial screw ups - Advice?
« Reply #15 on: May 12, 2014, 03:17:35 PM »
7 years... damn, I'm sure he can pay it off quickly as a doctor though.

I would just do it more quietly if you know it will be an issue. Why would you ever want to intentionally create a wedge between you, your husband, and your in-laws? That's like asking us how you can create martial problems in your relationship.


If anything, you shouldn't ever mention it. Your husband needs to know it through and through. If you are loud mouthed and just wanted to vent - do it online, nobody here knows you to judge you. Just my two cents.


SunshineGirl

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Re: In-law financial screw ups - Advice?
« Reply #16 on: May 12, 2014, 03:43:40 PM »
You could have him just say, "Hey, we got a collections notice on that loan, which is going to hurt our credit, so we're going to set up an automatic payment on our account, and we'll pay the monthly loan. If you guys want to chip in more, great, but don't worry having to pay the bill on time each month. We'll do that."

deborah

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Re: In-law financial screw ups - Advice?
« Reply #17 on: May 12, 2014, 08:22:13 PM »
You should be able to set up an online account without too much information. Then just start paying it. If the in laws pay it once in awhile too, then great, it gets paid off faster.

Will they find out?
This what I would do. However, I suspect that if they forget to make payments, they may not even notice that you are also paying. That way, no-one gets their nose out of joint.