Financing things for Family members...big mistake.

E

EJC+1

250+ Posts
Well....

Long story short....I financed $13,000 in furniture for my brother last year at 0% interest. A year has come and gone, no payments have been made, and the interest is due.

I did this because he's realtor and he helped get me and my wife into a new house and gave us his $7500 commission once the house closed.

He's swears he's not going to miss a payment although $3000 in interest is now tacked onto the account.

What options do I have?

Also...who else has gone thru this with family memebers?
 
Whenever you loan money to friends and family, you need to either A) consider anything paid back to be found money, or B) be prepared to destroy the relationship if you don't get paid back and take some kind of legal action.
 
Um, the pessimist says you're pretty much screwed.

The only issue is whether you'll let this affect your relationship with your brother for the rest of your lives.
 
i have a $300 maximum loan rate to friends/family

That way if a cousin borrows the money and never pays me back, i wont hate him the rest of my life over $300
 
It's 0% if you pay it off within the specified timeframe. One day over that, & boom you owe the accumulated interest. Great way to 'finance' things if you're responsible & make monthly payments.
 
DON'T DO IT!! I made the grave mistake of co-signing for not one, but two cars for my ex. He totalled the 1st, got a 2nd, and now that one is on the verge of repo. Needless to say, I haven't been with that sack of **** since March 2006. He has screwed my credit and all, but it's my mistake. Actually considered taking him to small claims or something, and while watching Judge Judy one day on a similar situation, I knew I wouldn't get **** outta him. Oh well. Live and learn. But seriously, do NOT co-sign or finance anything for anyone but yourself, unless of course you're married and know you'll be with that person for a looooong time, or at least until it's paid!
 
repoman.jpg
 
if a family member needs money for groceries or medicine i wil go buy it for them but i'm not going to just give/loan money unless i am prepared to never see it again.

i am not in the financial situation where i can be OK with never seeing it again so I don't loan money to family and friends.

unfortunately people get taken advantage of and then somehow feel like it is their fault. you did nothing wrong here chief.
 
Maybe it's just me, but spending $13,000 on furniture when you're broke sounds like a piss poor way to handle your finances. I would have sent him to eBay and furnished his whole house with second hand furniture for a small fraction of that price. I have no problem loaning $13,000 to a family member if he's really in need, but this clearly appears to be discretionary spending. That's where I would draw the line.

Bernard
 
Live and learn I guess. After I talked to his wife, she broke down crying and swore to me they would get it paid off. I told them if they ever missed a payment, then I'd kick their door in when they weren't home and repo all of that ****.

Yes...it was 0% financing for a year, then the interest due kicks in.

I asked him why in the **** would he wait on this **** and then have to pay $3000 in interest? Said he just forgot about it.

I really should've said no on this knowing what I know now. However, my brother did get us into our new house and gave us $7500 in cash. We felt obligated when he asked us for the favor.

Totally sucks.
 
I've done it with family, but it was documented like a bank loan, at my, the lawyer borrowing the money, request.

As a family lender, I would always begin by assuming internally that its a gift. Then as repayment is made, all would be fine. If repayment was not made, I'd write it off and never loan again. However, because I assumed it was a gift, my relationship would not otherwise be bothered.
 
Pick up a phone, punch in his number.

<<ring>><<ring>>

You: "Hey brother, I lent you $13,000 and you haven't paid me back. I'm in a tight spot and I was hoping I could get the money."

Your Brother: "Oh yeah, I am so sorry. I have been preoccupied with a ton of stuff, but I will get it to you ASAP! Do you want it wired or can I cut you a check?"

Problem solved.

ha ha
 
I have 1 simple rule: I never lend money to family or friends. I'm not a scrooge and will gift money but loaning them anything always is a very bad idea.
 
"just crossed bookman off my list of people not to mess with"

Does that mean bookman is now someone you would mess with?
 
I'm sorry, but if I called to remind someone that they owed $13,000 to a finance company for some freakin' furniture that I had to co-sign for and he tell sme he "Forgot about it" he is to get an EARFUL from me.

He FORGOT about it?!?!?!?!?!?!?! He sits on, sleeps on and dines every single day on $13,000 worth of furniture that I had to co-sign for and he FORGOT that he has to pay for it ?!?!?!!?!?!?!

This guy:
1. is the world's biggest idiot;
2. thinks you are the world's biggest idiot;
3. is a compulsive liar.

NO WAY I could let a comment like that stand. The fact that has the gall to even say something like that speaks volumes about why he's a broke dick deadbeat in the first place.

Bernard
 
as everyone else has told you, there is no way to forget to that he had to pay the loan back.

Every single store financed "same as cash" company that I have ever read about makes you do a bare minimum monthly payment which normally accounts for about 1% of your total balance each month.

he (or YOU) would have gotten monthly notices saying the minimum payment was due. Which on 13k would have been at around $130 every month.

The fine print of your same as cash offer says that if the minimum monthly payment is missed the interest free payment is forfeit and all interest becomes due immediately.

So either he legitimately "forgot" to pay it the first month and discovered that he had to pay interest on it and said **** it. Or he knew it was due and couldnt pay for it, and also said **** it (with the twist that he decided not to tell you about it)
 
The promotion was 0%, no payments for a year. After a year...22.99% interest is due if you don't have it paid off.

In other words, $16,000 is owed now. I've been getting the statements and then giving them to him.

We got into a huge argument over this today. We won't be talking for a while. He swears it'll be paid off. The half way promising thing is that he's in real estate, and he has made that much (or more) in a month before. The question is where is all his money going?

We shall see I guess.
 
EJC, ever watch Boiler Room? Alot of commission type peeps do spend like that. Also, what do you know about his extracurriculars.


Don't think you're alone. I have some really good friends, but I would never room with them because I would always get burned. It's tough being the friend with the job sometimes.
 
Update: Well...apparently our relationship is over for the time being as we have exchanged very heated words.

My brother seems to think that family should be able to borrow any amount of money at any time and pay it back at their own leisure. He also thinks that I owe him this since he did get me into my new house and sold my old one.

His 2nd point is somewhat valid which is why I agreed to finance his furniture to begin with.

However, he promised me that the furniture would be paid off in a year, and he promised me that if I did that for him, that he wouldn't hold what he did for me over my head....which is what he is still doing.

In any case, he is still promising to pay back the loan.

I guess I'll just have to pray he doesn't miss a payment and that he pays the bill off within a few months.
 
He also thinks that I owe him this since he did get me into my new house and sold my old one.

I had an earlier post (that got lost in the ether) that was essentially this: let your brother keep his commission (he earned it by doing his job) and let him pay for his own furniture. When you start getting into favors like this problems can arise: expectations become unrealistic, feelings get hurt, incriminations fester.
 
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