Accused of financial abuse and theft by my sister

[Mayamymay]

Hi, I hope you’ve all enjoyed Christmas. I actually thought I’d posted last night, but it’s nowhere to be seen!!

A few years ago I fell into some financial difficulties and had a lot of debt at high interest rates. My poor credit rating meant that I wasn’t able to move the debt to a cheaper option.

My parents are retired, comfortable with no debt, but by no means rich. I adore them both. They were keen to help and allowed me to take a loan and a few 0% cards (all with relatively low limits) in their names to save on interest costs. I manage the accounts Online and make the payments directly from my account. They are very clear that they’re pleased to help, but that they see it as their debt in name only. There is no cost to them whatsoever. The payments are made on time. I’ll occasionally use the cards if necessary. We’ve had the awful conversation about inheritance etc and I’ve been clear that if my parents died then any outstanding debt but be cleared from my share of the inheritance. My siblings would not be impacted whatsoever.

my sister has found out about our arrangement as has kicked off, accusing me of being a thief and a financial abuser. Our relationship has been strained for a while now. Dh says that she’s just spiteful and needs go fuck off, but she’s hit a nerve and I can’t stop crying.

is my husband right, and should have just ignore her?

OP, you've done nothing which qualifies you as an abuser.

If you have a turbulent relationship with your sister then there will be nothing in this situation to make her see sense.

You need to cut those cards up though, don't go spending on them or use them as you're not living within your means by having to use them.

You've done brilliantly clearing the debt down, but I would have it written up that any debt remaining would be deducted from any inheritance, this covers all parties.

You're on track to be debt free and 0% transfer cards are brilliant for this, keep going but ignore sister, this is between you and your parents so any comments from her can be binned.

Do cut up those cards though and start living within your means.

Thank you for all of the replies- I appreciate it. Taking some time out as I’m overwhelmed and need to compose myself for dc’s. What I will say is that I’m ashamed that I’m in this situation and that my parents have had to step in. The self loathing and how much I despise myself is something that I deal with everyday.

OP, you've done nothing which qualifies you as an abuser

I agree, but there is clearly a back story here on why the parents had to step in and take the debt and between her and her husband they could not.

I suspect more backstory is at play here…

You say it’s not her business but then your husband says:
”Dh says that she’s just spiteful and needs go fuck off”

In short you didn’t tell her because you knew deep down she’d disagree with it, as does 90% of Mumsnet strangers. I think your husband is a problem here too. You’ve both managed to convince each other there’s nothing to see here.

There has to be, so the ops not giving the full story. She’s married. Between them they couldn’t sort this, it’s 20 grand not a hundred, he couldn’t get zero interest and she still needs to use the cards at times. So there is clearly a much bigger back story in terms of finances and her parents supporting her than she’s willing to say. Which is fine, but skews the answers.

Years ago I got into a similar pickle and my parents allowed me to do the same, but there was one condition - I was not allowed to accrue any more debt. It was incredibly hard but I was so thankful for their help that I stuck to it. Im now debt free and have an intact credit record - I am beyond grateful for their help.

So no, with their consent, I don't see how it is fraud or financial abuse but I do think you absolutely have to stop using the cards. I can understand they bailed you out but continuing to borrow is a really, really bad idea. To cover yourself, I would also ask to formalise the agreement with some kind of addition to the Will to say that you borrowed X amount and if there is an estate left when they die, any amounts owing will be deducted from any inheritance.

To a certain extent, I can understand your sister's annoyance. Presumably there's nothing in writing so if your parents were to die suddenly, there's no proof of this arrangement at all. The other thing to consider is that if they had to go into Care and there was no money left, the debt you owed would be written off as there would be nothing left in the Estate to pay it back.

So in short, I would say no, it's extreme to call it financial abuse but you should definitely formalise the agreement and secondly, stop spending.

Been there, done that and I promise that getting yourself out of debt is the best feeling ever!

The % cards should have been either cut up or they should be in your parents possession.The whole idea of % cards is to clear debt quickly they should never be used to pay bills.The idea of having multiple cards to pay debts is ludicrous.

What are using the cards for at the moment?

Assuming:

• Your parents are of sound mind and agreed freely.
• Your parents are solvent.
• You repaid everything on time and continue to do so.
• should anything happen the debt is considered in the inheritance

Then this is fine and I think your sister is a dick and using this as a stick to beat you with.

As someone who got into a bad situation...
I'd like to think my family would help if they could

As a sibling....
If a fellow sibling got into debt in your circs I would be okay with this arrangement. The only people who stands to benefit from it otherwise are credit card companies....

As a parent....
I would always want to help my child get out of debt and while I wpuldnt necessarily pay it off, i would do exactly what your parents have done.

It's completely reasonable.
If you couldn't hold down and job / were unreliable/ using drugs / had severe mental health issues it would be a more complex and nuanced situation

The fact op says her parents are happy for her to use the cards to pay bills tells me her parents don’t understand the concept of % credit cards.So yes I think their is a big backstory and her parents don’t fully understand what they have signed up for.

Also OP, if you borrowed this on your parents' credit rating in 2021, is it possible your own credit rating has since improved? If so it might be possible to once again get low interest rates in your own name. Worth a look and if possible, get it back in your name.

I know a family who did something a little similar.
The daughter got herself into heaps of CC debt and finally broke down and confessed to her parents when she couldn't even make minimum payments.
The parents took out a low interest rate loan in their own name and used that to pay off all the CC debts.
They then had the daughter's salary paid directly to them, took what they needed to pay off the loan, and gave her a small monthly allowance to live on, until the loan was cleared.
This was their proposal but wholly accepted by their daughter as a necessary lifeline. I don't see this as financial abuse in any way.

It worked because there was a very clear plan to pay off the supporting loan in a specific timeframe, worked out based on projected income.

What I'm not clear on is whether you have any such plan in place. As long as you do, I don't think this is financially abusive, it's just parents supporting their child to get out of debt. It carries risks (as did the above situation) but is probably better than the alternative.

The only issue I see is that you are continuing to use the cards

The fact the husband couldn’t get zero percent says there is further debt, and significantly so. Plus they need to use the cards to pay big bills. So can’t use the husbands and have no money behind them.

there is clearly a significant financial problem. Op has your parents helped you before?

Whatever the whole story here is, and it’s impossible you’ve given the whole story due to the fact you are married and your husband has an inability to get zero interest , then that whole story is clearly what your sister is reacting to, as well as potentially what the money is spent on,or what really caused the whole debt and why you had to get your parents involved.

It's cheeky of you to expect parents to bankroll your debts. And making them take out loans for you in their name isnt on. Your sister is right to be annoyed. Take responsibility for your own debts. It is financial abuse of elderly parents. Awful.

You might not be financially abusing your parents but you are taking advantage of them @Mayamymay and your sister is quite right to be concerned. You are putting your parents in a potentially precarious situation and you are using their credit for yourself.

Hindsight is a wonderful thing but at the point you were in the financial mire you should have gone to any of the debt charities that are out there, your credit rating was already in the toilet it would have made no difference using them to stop the interest rates and manage the debt on your behalf.

The fact none of this is documented is no doubt at the heart of why your sister has reacted as she has, it is all well and good you saying you would be honest at the time of any inheritance but frankly why should your sister trust you? People change when money is available on death.

You absolutely need to cut up those credit cards, you have to stop spending on them full stop, you are not managing your finances by continuing to do so.

You also need to get the arrangement with your parents formally documented in writing.

There were other options to your parents taking out credit in their name for you, you should have explored those other options and I don't believe that your parents are fully aware of the position they have put themselves in and neither are you as you continue to spend on those cards.

I can see how that could be. Do you get anything you ask for? Are your parents solving all your problems for you despite being a married adult?

Also it would be really hard for them to say no as they love you and want to help you. That’s why even if they have capacity it’s not really a free choice and is why the whole scenario absolutely stinks.

But yet you do....
Are either of you and dh working?

So pay back the debt, but you absolutely have to cut up the credit cards. And you need to make adjustments to your lifestyle to account for the fact that you can’t afford to put things on a credit card. If you can’t afford it, then you can’t have it.

@MayThe4th is spot on here, OP. That's almost word for word what I was going to say. But I'd also add that you need to cut right back on all discretionary spending. Before you buy something, ask yourself "Is this essential?". If the answer is "no", then don't buy it. If it's "yes", then ask yourself "Is it urgent, or can it wait till pay day?". If it can wait, then buy it when you get paid.

Your parents have been amazingly kind, and I do wonder if they fully appreciate the implications for their finances if you were to default for any reason. I know you don't intend to abuse their help, but none of us can see the future and when things go wrong, it's all too easy to slip back into borrowing.

You need to start putting a little away each month towards any bills that aren't already on a monthly direct debit, plus some for repairing/replacing stuff as it gets knackered, and learn to live on what's left after you've paid for all the essentials. And look at all your outgoings, see if there are any where you can get a better deal, subscriptions you can cancel etc. Then you'd be able to use the savings to start an emergency fund, so you don't have to resort to using up your parents' available credit, or increase the payments on the cards.

But kudos to you for managing to clear a good chunk of debt fairly quickly. And you might find that it goes down a bit faster than you think, as the interest on the debt that isn't interest free goes down, more of what you pay will come off the amount outstanding. (This is why you should pay more on the card where you're paying interest.)

If you were on top of your finances you wouldn’t be using someone else’s credit cards.

It’s unfair to your sister because if SHE needed help presumably all your parents’ resources are being used up. So she is being penalised for being the responsible one.

No wonder your DH said she should “fuck off” - he is benefitting from this situation and is probably waiting for your parents to die so he can cash in. Maybe he should pull his finger out and get on top of his own finances!

If you were genuinely on top of your finances you wouldn't need to pull this kind of fraud.

Taking out credit cards or loans in someone elses name is clearly fraud, but that's not what the OP has done. She has however asked / pursuaded (and we'll never know whether they willing agreed or just felt they had to to help their daughter...) her parents to take on debt to help her financial situation.

I think whether intentional or not that would be looked at by most as potentially coercive and/or abusive behaviour, particlarly as there was no external advice from either elsewhere in the family or otherwise. I'm pretty sure none of the organisations who support those in financial diffculty would condone this approach. Fine the OP is paying them at the moment, but who knows what might happen. I suspect that her parents don't have the ability to make these payments from their income without signifcantly impacting their lifestyle, otherwise they'd likely have had sufficent savings to use to clear her debts and arrange a repayment plan with her.

If I found that any of my siblings had done the same to my parents and I'd be livid. I'd be happy for my parents to lend them money - it's theres, they can do what they like with it. But borrowing money at risk to their own financial welbeing makes no sense at all.

If you are using the cards occasionally you aren't on top of your finances, what about your husbands credit rating?
I can see your sisters point of view- how I read it you and your husband have no debt but now your parents do?