Reply to Would you co-sign or lend money to a family member?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]GIFT.  Not loan.

Never, never, never.  A huge lesson learned and we are recovering this year.  We loaned to three people - family, employee and friend, years ago. They lived large but had problems returning the money back. We had to really beg to get the money back, and they returned it as if they were doing us a favor. We were lucky because we did not lose out a huge amount. In 10 years we were not given a single cent as interest. We also did not have any paperwork so we did not want to come down very hard.

In the end, the relationships suffered. [/quote]

I have to add here, that I have given huge gifts of money to my brother to help him out. I have no expectation that it will be returned, even though he sees it as loan.

Any money - loan or gift - has to be of the amount that you do not care if it is lost. It should not expose you to any financial hit - your retirement, college funds, medical, housing.

Ask yourself this question - if you need money today, who will give it to you? My answer is that probably - no one. [/quote]

[b]If they had it[/b], my parents would give me money. Same with MIL. [b]Probably [/b]my siblings. [/quote]

If they had it to give as gift, your parents, MIL and siblings would give it - as they should.

No one should jeopardize their financial health and loan money to a person who is incapable of returning the money in the present. This is what banks do. You loan based on their income capacity in the future. Obviously, you do not charge any interest. You want to help them to become established and productive.

I have given and will continue to give to siblings, parents and also my children. Each one is a gift and it comes with caveat - I want the money to be used for positive things that can help the family member to progress or create a future income stream. So I will not pay for a vacation, but will pay for college education, medical expenses, repairing a house to rent it, providing a roof over the head, living expenses. I have been given loans by my friends and I have repaid as soon as I was able to.

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