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?

That's nice, Fishy, you do you. In the OP's case it would be stupid to give this spendthrift a penny. STUPID. He will never pay it back and feels entitled to a lifestyle of luxury.

@FishyDuck

If you're so convinced that they should help, then would you care to go back and answer the questions I directed at you?

This situation is not the same as your aunts. These people are not facing bankruptcy. They have the means to sort it out; they just need to downsize, they need to call their creditors and arrange payment plans, they should call a debt charity for help with that and they need to manage their finances. The OP giving them money doesnt help with any of that.

Oh, and they dont have the money. It's been set aside for this children's university fees... which, if you hadn't noticed, are quite expensive.

The OP's DH has funds available so I think it would make sense to use them productively in helping the BIL.

No, no and thrice no. How is it productive for OP and her dh to use all their savings to bail out BIL? He gets to continue his lifestyle whilst the OP and her family have to forego their future for him? Seriously? BIls family benefit at the expense of the OP and her family?

The best and most productive support the OP and her family can provide is tough love.

For me, there's very much a fool me once, shame on you, fool me twice, shame on me.

BIL has already been given loans, and failed to fully repay them. That was a far smaller, relatively insignificant sum, when times were still good. Now he's asking for a very significant sum, to avoid having to deal with what is his and his wife's responsibilities and financial reality, when times are very much worse.

I think you'd have to be a blethering over emotional idiot to enable him to do so. But if you'd happily fork over £25k and your own family's well being and good will so you could polish your extended familial halo, then I guess it could sort of make sense. . .

OP, it sounds like your BIL can't manage his money. I'd absolutely not lend him money and £25k sounds bonkers. You and DH need to have an honest discussion about this and you need to make it clear you don't agree to BIL's request and why. I think your DH won't have many (if any) counter-arguments. I understand he's family and he's about to end up in difficulties, but you're not his nanny to bail him out just because he was living a lavish lifestyle as if there was no tomorrow.

@FishyDuck hi OP's SIL

That is what families should do imo- they should be looking after each other and providing support when possible. Sadly what normally happens is one person becomes the giver, another the taker and the giver is never ever allowed to make the taker feel bad for not repaying their debts.

BIL is a taker. Almost £100K from MIL on a house purchase. They had a legal document, a lien, under which agreement he would pay her every year out of his standard bonus payment, MIL would retain part ownership until the last penny of the debt was paid. Then he remortgaged. She took her name of the lien to allow this to happen... guess what he did next?

DH was a giver. When BIL was threatened with redundancy he asked DH for a large lump sum, £20K. When he said no the whole family told him he was mean, stingy, nasty. It took a lot of tongue biting and breath holding, but DH managed not to say what he thought of them (I would have told them, but they haven't spoken to me since last time I spoke up!).

In OPs case her BIL has already shown that he is a taker. He as already borrowed and not repaid.

You know that old saying: Fool me once?

Ah! While I was ansewering the door mbosnz got to the old saying ... it should be one of everyones life truisms!

A thousand times NO.

@FishyDuck would you give away loan money to someone who had already failed to repay money they had previously borrowed from you, despite them spending £16k on a holiday?

@FishyDuck Was your aunt constantly borrowing money and not paying it back before that? Was she living an extravagant lifestyle that she couldn't afford?

And even after everyone has pointed out that this money will NOT help the BIL out, it just delays the inevitable for a few months, and that enabling someone like this is NOT helping them, you're sticking to your view, like a stuck record?

You also haven't said why OP's family should be detrimentally affected by this. Just because someone is related to you, doesn't mean you have to stick by them. If a member of your family was done for rape or murder, would you still stick by them, because "They're faaaaamily"?

It's tricky. In our family I am the irresponsible one who always seems to just trickle away money without having anything to show for it. My sibling loaned me 25k as a loan they took out for me to buy my house. But I haven't missed a single payment each month and wouldn't dream of doing so, it is the first bill paid each month.

It's possible to be pisspoor with money, yet still fulfill financial obligations so I would say if he has form for not paying then no way.

Also, why a lump sum? He has already shown large lump sums get blown easily. If he is out of work your husband could odfer to take on say electic and water bills till he has a new job, but with the knowledge it has to be paid back later and a payment plan in place for when he starts working.

He can always sell a car.

That is what families should do imo- they should be looking after each other and providing support when possible.

And they are.

They are providing much better, more useful support than simply writing a cheque.

'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.*'
*
Just FYI, his solicitors won't be able to pay any money directly to you. Solicitors are not allowed to act as banks and will only be able to redeem the mortgage and pay the estate agent and any other disbursements and then pay the proceeds of sale to their clients.

You will have to get any money you put in back from your bil.

@Motoko

Not sure if you meant to tag me. I am categorically against giving them 25k. But the OP said they've offered to help with the upfront costs of putting the house on the market, with the agreement that it is written into the sale that they get their money out first.
The costs involved in that will be relatively small, and unless the BIL is in negative equity, they should be able to get back a couple of thousand. Another poster said they shouldnt have offered to do that; I disagreed.

If selling the house is the best option, but they need a thousand or so upfront then I would be willing to lend that if solicitors took note etc.

@flyingspaghettimonster

They cant sell their cars. The OP says they have 50K cars on finance and are only a quarter of the way through the term, so they cant even hand the cars back without paying a massive early exit fee.

The BIL and wife have shown they cannot be trusted with loans so the OP shouldnt be offering to pay large lump sums or ongoing bill payments. All they should do is offer emotional support and advice when needed.

You've handled this well.

@FishyDuck
"I think the £25k could be used to effectively 'cushion the blow' and maintain a good lifestyle for the BIL and his family."

It couldn't. The money will only last 3 or 4 months and then the blow will be just as painful as before. Who will cushion the blow when the OP tells her children that she has no money to help them at university?

In a further post FishyDuck suggests the money can stop them having to drastically adjust their lifestyles. Newsflash - if the redundancy goes through BIL needs to drastically adjust his lifestyle. With his work, his wife's work, the inheritance and debt the family have probably been spending 100k a year. If BIL is now lucky enough to find a new job the famiy might be looking at a 30k income for the time being (depending on the level of his wife's earnings). Drastic changes are needed.

OP I think you are doing the right thing not lending the money. It would be throwing good money after bad. Because BIL is not familiar with debt management and is panicking he thinks he needs to secure the money to pay his bills (no matter how unsustainable that is). Sometimes the absolutely right thing and only realistic thing to do is to default on some bills.

Immediately (or on confirmation of redundancy) he needs to arrange a covid payment break for his mortgage and cars. Any debts that can't be suspended he needs to write to and let them know he has been made redundant and is working with a debt advisor and will be in touch. He needs to find out his options properly and not act in haste.

Don't underestimate the knowledge of the experienced posters on Money Saving Expert forum (check out Debt Free Wannabe). They have been there and some have a decade of experience of daily financial discussion and advice.

Selling his house to pay debts might be the best solution for your BIL or Bancrupcy but there are other solutions also that may allow him to keep his house, if the mortgage can be afforded with a new job, and to default on non priority debts.

In a nutshell you stop paying non priority debts and eventually the lenders default THEM - (when they have to stop charging interest) and often sell them on cheaply. The person makes an arrangement to pay £10 a month or whatever based on what they can afford and generally as long as they keep paying life rumbles along. The lender can take you to court but the court won't order you to pay more than you can afford either. A person is unlikely to lose their home for non secured debts if Tu ey are paying wjat they can afford.

Re the cars: BIL may not be "allowed" to hand them back but once he tells the company he can't pay they will arrange to take them back but he will still have money owing. As above he would then pay a small affordable payment plan.

Only use free debt advice. Don't let your BIL make the mistake of signing up to a company that takes a big cut for managing. Their are organisations that will do it for free. Check out MSE for a list of trusted organisations.

Hope things work out for you and BIL. Maybe he won't be made redundant and this will give him the kick up the bum to change his ways. Hope so.

@FishyDuck

The OP's DH has funds available so I think it would make sense to use them productively in helping the BIL. You still haven't explain why OP and her DH should give his feckless brother more money.

Most of us would agree if a family had some life event that meant they needed a loan in an emergency, this is not an emergency this is one family living and spending beyond their means.

That amount of spending left me gobsmacked! I absolutely think that people should be able to spend money on whatever they want... if they can afford it! 50k cars? 16k holidays? Made me feel a bit better about my boring life now! We've got an old banger third hard and a 8k max value second hand 4x4... haven't been on a holiday abroad in 6 years, just camping and caravanning... but at least we don't have the kind of problems your BIL is facing!

Good grief I’m trying to imagine having the gumption to ask for 25k when I’d lived my life as your BIL has. How did the refusal go down I hope he had the good grace to back straight off ?

I agree with you also I would pay their (modest) up front selling cost if that is their considered plan of action and I would pay the bond/upfront one month rent on a property if they will be renting. I'm talking all in at under 2k or definitely less than 3. I would accept if you can be paid back from equity but otherwise have no expectations of being paid back as they won't be able to afford to with all their other debts.

[quote FishyDuck]@Russellbrandshair

I have actually- an aunt of mine was in a very precarious position and facing bankruptcy. We pulled together as a family and money was found from different sources to help her, on the understanding that some of it would be repaid when possible. I contributed a substantial sum.

That is what families should do imo- they should be looking after each other and providing support when possible. The OP's DH has funds available so I think it would make sense to use them productively in helping the BIL.[/quote]
So having read what OP said about there being almost zero chance of getting the £25k back if they lend it to her BIL, you still think she and her DH should relinquish their life savings – the money they've set aside for their children's college education – to help out him out, when he already owes them money? I simply cannot understand you're thinking, unless you're so wealthy 25k is pocket money change to you. But seriously, why should they suffer for his financial irresponsibility?

@FishyDuck can you tell us more about your aunt’s deliberate financial mismanagement and how she’s turned her life around?

It concerns me that you feel someone needs to lose luxuries gradually... I’m picturing a scenario where the person buys mulberry in spring and coach in autumn. 😁. Where’s others might suggest “sell the fucking mulberry and check out m&s sale”!

Never mind M&S it would be promarnis finest if I absolutely had to buy new clothes, and Asda basic food and working every hour I possibly could whilst selling anything of any value and working with debt counselling agencies to permanently get myself out it of debt.

And yes I’ve done it. Without any sense of entitlement over anybody else’s money. Even though when I was going thro the hell of debt it was due to abusive ex.

I think Fishy is the ‘aunt’ in her scenario and trying to justify why she’s entitled to her relatives hard earned money and why it’s fine for her to spend other people hard earned cash and why they can’t possibly resent her for it.