WIBU to say no to bailing BIL out?

[YeahWhatevver]

Really struggling to work out what to do.

DH and BIL are relatively close. BIL has never been great with money, definitely lives for the moment. Has in the past had quite a bit of credit card debt and has previously struggled with managing his money. He has (had) a decent job BIL and SIL both work, though SIL is 2 days a week. They have 2 kids.

DH and BIL inherited just under 90k each about 2.5 years ago from their Mother's estate. Nothing was ever discussed about what they were planning to do with it, we put a lot of it into the mortgage or set it aside to put into the mortgage when our fixed term ends (want to a out early repayment fees) and have put some aside for our kids (first cars/bit ot money for college)

Looks like BIL spent most of his - none of our business it's his to use as he wants.

BIL is looking like he'll imminently lose his job. And called up DH asking of he has any of mum's inheritance left as he's in a bit of a spot a figure of £25k seems to have been banded about. Annoyingly DH said yes, we've got quite a bit in savings, so BIL knows we could if we wanted to

DH has previously "loaned" BIL money for it to never be returned fully.

Our family and BIL's family have similar incomes. So it's not like DH has got lucky while BIL has been dealt a bad hand in life.
BIL has a lot bigger house, 2 nice cars lots of personal finance

I can tell DH is protective of his brother and wants to help but I really want to just say no. We've made plans around this money, made sacrifices to be in the financial position we are now and I don't see why we should squander those plans to bail out someone who has failed to take responsibility for themselves.

Problem is, I can see this creating a huge rift.

WIBU to speak to BIL and say no?

Do you have the odd spare 25k lying around, @fishyduck?

@FishyDuck

So I'm not normally a proponent of learning buckets of money to people. But I think a DB is a special case/ he is in a sticky situation and I think there is a certain brotherly obligation to help out where possible.

Given that your DH has the money, I think it would do him no harm to help out. I can understand the argument about him not making unilateral decisions over family finances, but I would say the money is effectively his given that it came from a member of his family as an inheritance.

I think it's a little controlling to dictate to him how he can and can't spend an inheritance that was given to him.

Would you say the same if the BIL was an alcoholic and the OP had a bottle of vodka in the house? Or a drug addict and the OP had some prescribed Morphine?

No.

The spending that BIL does is just as destructive as both of those things (and may be due to gambling, who knows?) and spending can be addictive. So the absolute best thing the OP and her DH can do is let him hit rock bottom. Any therapist would tell you that.

@PickAChew

I believe that families should pull together in difficult times- we had a similar situation in mine where an aunt of mine was having issues with debt and was nearly bankrupt. The family pulled together and different family members (including myself) contributed money to pull together the amount required to avoid bankruptcy proceedings.

IMO that is what families should do. Clearly it has to be dependent on your own financial circumstances but in the OP's case, the £25k is there.

More importantly though, it is really nothing to do with the OP. The money was given to her DH as an inheritance- it is his money and he should be the one deciding what to do with it.

But this isn’t a one off, the brother is continually borrowing money and not repaying. I doubt this 25k would be the last one. And the op has already explained that their finances are joint.

@FishyDuck I have to respectfully disagree. In giving his brother that money not only is he enabling his brother and not helping in the slightest, he is taking it away from his own children, they will then go without because his brother is so irresponsible, the OP and her DH clearly have a healthy marriage whereby financial decisions are made together.

The whole 'its what families do' thing has caused so many problems for some many people, it's a toxic outdated attitude, that has allowed people to be treated appallingly by family members under the guise of 'its what families do' I'm from a toxic family who have that exact same family before everything attitude and it's dangerous

[quote FishyDuck]@PickAChew

I believe that families should pull together in difficult times- we had a similar situation in mine where an aunt of mine was having issues with debt and was nearly bankrupt. The family pulled together and different family members (including myself) contributed money to pull together the amount required to avoid bankruptcy proceedings.

IMO that is what families should do. Clearly it has to be dependent on your own financial circumstances but in the OP's case, the £25k is there.

More importantly though, it is really nothing to do with the OP. The money was given to her DH as an inheritance- it is his money and he should be the one deciding what to do with it.[/quote]
Why did your Aunt get in that situation?

A redundancy or serious health crisis, could happen to any of us, I would do the same.

Lack financial savvy and over spending? No.

The money isnt "there". Its accounted for, if you want to make it about ownership then it has already been gifted on the DH's kids, as is his right under your rules of it being his inheritance. So it is no longer his to spend.

@FishyDuck

But they arent facing bankruptcy. They just need to downsize and reign in their spending. Maybe sell a lot of their expensive items. Debt can also be managed by setting up manageable payment plans.

They dont need to be given money.

The OP and her husband can really around them and offer help and advice for budgeting, finding a new home, looking after the children while they sort things out etc.

Giving a spending addict money, which is earmarked for their own children's future, is not helping.

There's pulling together and there's putting your own family at a disadvantage to bail out a profligate piss taker.

To most people 90k is borderline life changing. OK, not in the rags to riches sense but in the getting by to quite comfortably ahead of the bills sense.

BIL made the choice to overspend. OP shouldn't have to sacrifice a little financial security because of his financial incontinence.

Like hell would giving him £2k keep the family peace. He would keep coming back for more, just as he always has.

Far better to give him nothing and hold firm on that, remembering that this is a manchild who does not understand the world "no" and will keep pushing for more.

BIL is obviously not used to budgeting.
Offer help with this by whichever of you is best with it.
Also offer practical support by offering to babysit for job interviews etc. if it doesn’t impact on your work.
Could he consider a move to flying cargo instead of passenger?

I absolutely disagree with Fishyduck.

My DH too has a brother who is financially incontinent. Giving him money would be like pouring it into a financial black hole. There would be no end to it.

No! Pouring money into a financial black hole isn't "what families do" if they have any sense. The OP and her DH are doing the only sane thing and putting the financial security of themselves and their children first.

BL meanwhile has blown all of his £90k and more on flashy home improvements, cars and holidays. Now he wants more. At least £25k more. Only a complete fool would hand that over to him.

And sometimes avoiding bankruptcy isn't the best solution. Bankruptcy laws exist for a reason, to free a person from debt that will not be reasonably repaid in the short to medium term and enable them to make a fresh start, while making an affordable contribution to their debts.

If the debt has been run up due to chronic overspending it could also force a person to learn to budget and manage their money better, as they're effectively banned from credit for several years.

But the BIL would need a detailed review of his finances and professional advice, to identify the appropriate solution to his finances. But as this could be his rock bottom, a loan/gift is the last thing he needs, even if he doesn't realise this right now.

£25k is more than most people earn after tax in a year!!! That’s ridiculous. Maybe a couple of grand but tell him no.

And I'm willing to bet if OP DH gave his brother 25k he would be back with his begging bowl with in a couple of months for another 25k.

I mean after all he hasn't even been made redundant, and he's begging for money. He may or he may not, yes the industry he works in is making redundancy but he may be the one of the lucky ones and not lose his job.

What about his redundancy package he may get.

We were in almost the exact same situation. BIL asked DH for £10K 2 years ago as their business was in trouble.
They live in a 6 bedroom house and apparantly the minimum monthly spend for a couple and one small child was £7K and the mortgage was due.
We agreed to 5K with the condition that BIL came over and went through finances with DH for help. This was what was we could afford to write off. Turns out he had already asked and received £15K from PIL. A month later , having not been in contact since , he text asking my husband to ‘ transfer that other 5K over’. DH said no and BIL threw a strop and didn’t speak to us for a while.

6 months down the line the 5K hadn’t been paid back, and BIL wouldn’t speak to us and we were unable to do things that the money had been put aside for ( 10th wedding anniversary trip included) We felt resentful and PIL were pressurising DH to be one big happy family . They insisted on taking on the 5K debt .
None of this money has been paid back and BIL has been out of work since. But at least BIL and DH are friendly again which has been possible now that there is no debt between us.

Only lend what you can afford to write off and know that it will annoy you every time they drive up in a big car or you step foot in their new kitchen.

I wouldn't lend that kind of money to a spendthrift like your BIL. If you do then a contract or IOU is not sufficien. You would need to put a charge on his house as the only way to be sure if getting it back. I did this with my sister as I made it clear that a large loan needed to be secured. She did payt it back as agreed and I then removed the charge.

Stay strong OP. These are huge sums of money. They have had £90k plus their actual salaries. That's probably another £80-£100k a year depending on their earnings, so you are looking at somewhere in the range of £300k in the last 2.5 years. The fact they are in debt rather than in a decent position with savings shows how they are ploughing through water. Sadly £25k probably wouldn't last them more than about 3 months unless they seriously scaled back or BIL managed to get another job. So presumably they will be stuck again in a few months. I suspect your BIL has got used to such high sums of money this doesn't seem like such an unreasonable request.

You and your children shouldn't be effectively punished for being sensible with your money. I also think this would cause way too much resentment for years to come which would sour the relationship anyway. Plus those saying his mother would have given it if she were alive, I disagree with this. Firstly it may well have been tied up in a property. Secondly she may well have agreed to help but essentially taken it out their inheritance share.

I feel for you as it's tough if this causes a family fall out, but I would say remember that if it does, BIL has caused it by being unreasonable not you!

DH spoke to BIL for over an hour last night.

Apparently BIL put more than half his money into a property developing idea with a group of his friends to buy and do up run down houses. Not clear how but its gone awry but he has lost quite a lot of his investment and what remains is tied up in a co-ownership of the houses. There seems to be a dispute amongst the participants about selling them and cutting their losses or renting them out.

Added to that are the cars (both >50k)
The kitchen
The mortgage
A yacht charter holiday in the med which cost...... Wait for it...... £16k

Anyway DH said pretty much whats on here, money is allocated to things, it's tied up in fix term savings and investments and we can't offer any final help. Said he'd not spoken to me as it just wasn't going to be possible.

DH did offer to sit down and try and look at finances and work out a way to restructure it, offer wasn't accepted, think mostly embarrassment on BIL part.

Didn't offer the babysitting thing as we're not within reasonable travelling distance for ad hoc quick visits.

BIL seems resigned to his fate. Seems to think that selling up won't be enough as that only deals with the mortgage and won't prevent him defaulting on payments for the kitchen, the cars and several other things on tick. DH asked about redundancy payment but BIL has only been with his current employer for 16 months and seems to think it'll be statutory redundancy (don't know what amount this will be but not a lot I'm assuming)

DH is going to help him make an appointment with a financial advisor which we've said we'd pay for. We've also said we'd pay for the survey/media pack conveyancing fees to sell the house (assuming some or all need to be paid up front) on the condition that it's agreed in advance with the solicitor we get it back directly from the solicitor on completion of any sale.

Can't see this being the end of it, I assume they'll ask SIL's parents for help (not sure of their ability to help) but I think they really have got a taste for the nicer things in life, it'll be hard to give it all up.

The trouble is people like this fall on their bum eventually & you were right to not go down with him.

£16k for a yacht holiday is just 😲 when you’ve got debt for kitchens to pay.

You need that agreement in writing if you can’t afford to write off what your offering.

DH is going to help him make an appointment with a financial advisor which we've said we'd pay for

I'm not sure a paid financial advisor will help. They need debt counselling and financial advisors are usually about investment and pensions. Unless by paying you can jump the queue at Stepchange or the CAB, it might not achieve anything they can do for free.

Also most paid debt advisors are more interested in getting people onto long term debt management plans or IVAs, even if that's not the best solution for the client, because that's how they make their money.

If he gets made redundant, or is currently not meeting their bills for other reasons, eg he's furloughed but receiving far less than his full salary due to the £2.5k cap, they need to apply for all the payment holidays

www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/

If they can pay off a lot of their finance deals and credit by selling the house, that's probably a good solution. However if they are well short on the equity, that's when they might as well look at bankruptcy, as they're losing their house either way. Or they might be able to buy a much cheaper house with a small mortgage as well as pay off their debts, but obviously can only make these decisions after looking at their full financial situation.

IMO that is what families should do. Clearly it has to be dependent on your own financial circumstances but in the OP's case, the £25k is there

What utter rubbish. No, this isnt what "families do" and actually, using emotional blackmail to get money out of people is a subtle form of financial abuse.As multiple people have pointed out- throwing more money at someone with an inability to control their spending is enabling them and driving them deeper into financial problems. It would actually be unkind and cruel to give him more money to piss away on yachts and goodness knows what else. Thats not the action of someone who loves their brother and wants the best for them at all.

I think they really have got a taste for the nicer things in life, it'll be hard to give it all up

Exactly and this is part of the problem. Over spending feels nice! Its amazing to drive a flashy brand new car that everyone is impressed with and gushes over. You continually get positive feedback and that in turn makes you feel good about yourself. Having to give up that feeling when youve relied on it to make you feel good for years is going to be really really difficult. Its necessary however and hopefully not having those things will force hi, to rely on his own self esteem to value himself rather than getting value from having nice stuff.

If he has only been with his current employer for 16 months then there is no payout under statutory redundancy - it doesn’t kick in until 2 years.

And £16k on a holiday!?!?!?

You’ve made the right decision. £25k would of been a drop in the ocean for BIL. He would of got through that quickly and asked for more money.

Did your DH ask him why he hasn't paid back the previous loan in full?