My sister in law is in severe financial trouble, how do I stop her spending?

[mummytoonetryingfortwo]

My sister in law has revealed to me last night that she’s in real difficulties and has asked me for help. She’s 23.

She works 25 hours a week for £12.60 an hour, so brings in £1,200 a month. She is studying for her masters, so cannot work more.

She has told me that she has nearly £5,000 in credit card debt, £1,500 in Klarna debt and, I believe, a personal loan around £7,500. She also has an interest free overdraft of £500.

She is spending the majority of her wages to pay off her debts, meaning she’s living in her overdraft. She just cannot stop herself spending. She’s almost addicted to it. She wants new things all the time, it spirals, and she gets into this mess. She’s now told me she’s felt suicidal over these debts.

I am able to clear these debts. I want to, but I want to do it on the condition that she breaks her spending habits and starts to get herself sorted. What can I do to help her on this path? What tactics can I use?

I doubt that a student with a mountain of debt will qualify for any zero interest credit cards…

It sounds like you have made up your mind. You say you want to help her change but with all due respect what experience have you with this? She is an addict and addicts are very manipulative. She needs to get professional help. I think if you pay off her debt you are enabling her and perpetuating her addiction.

I think the longest I had was 18 months but you just transfer to another once you get to the end. Usually a lot more offers because you have been good at paying the last off with no late payments.

I think you’re looking at her problem as a ‘lesser’ one because it’s not drugs or alcohol, but she clearly has an addiction.

Like people who do drugs, she has ‘reasons’ for doing it and thinks if this or that was different, it would solve the problem. That’s lies they tell to themselves.

Give her the money by all accounts (i would tell my husband) but she needs professional help to deal with this addiction. Otherwise you’re just solving it short term and will find yourself in this situation again.

I know a few people on a friend’s family and they go back to racking up debt time and time again, and one of them is in her 70s, so they never change without help and with the knowledge in the back of their mind that someone will bail them out.

unfortunately it’s doubtful SIL would get approved for a 0% credit card

I finding the lack of willingness to accept she needs to be accountable quite infuriating.

Help her, yes. Pay off her debts, no. She needs to sort herself out, and you can be kind to her about it. Help her put things in place to stop her spending (which I doubt will work as it sounds as though her mind set is she's hard done by).

Enabling her (and clearing her debts is doing just that) is cruel, actually.

That’s not what she meant. It’s that it all starts from a place of compassion and caring and goes tits up, damaging relationships left right and centre.

Her situation isn’t a simple one, she has complex issues. Self worth, spending addiction, debt, no career, poor family relationships… if she moves in with you not only are you responsible for housing her but also getting her work. She also leaves behind any friendships. That’s very enmeshed.

Thank you, I will do some research into this one and see what options she has.

You can only try. I was a single mum with debt and I managed. Good luck to the OP.

I can get her work quite easily, I’m not too concerned about that one at the moment. My heart just aches for her and I want to help her out.

@mummytoonetryingfortwo I agree get her a fresh start and go move in .
once she has done that .pay off the £500 overdraft and sit with her while she calls and cancels it’s off .
Then go through her debts with her .
Make a payment plan and get her to pay her contribution.
Id agree with kindness . I too would help if I could I wouldn’t want to do it knowing she will see it as a free ride and use the debt all over again. .

You would just be enabling her to keep on spending if you pay off her debts.

Hard as it may be she needs to get specific debt planning advice, there is a lot of this available so look at MSE with her.

She should speak to the companies she’s in debt to. If she tells them the situation and that she’s feeling suicidal they will be able to help her. My partner works in the credit industry and usually in this situation they will freeze the card so she can’t spend any more, and then set up a payment plan based on her income. She’ll also then be identified as a vulnerable customer so they won’t sell her to a credit collections agency

This may affect her credit score (although it’s likely already affected), but at this point it seems like she needs controls to stop her taking out more debt. She can also add a notice to her credit file along the lines of “do not provide me with credit”, to stop her taking out more loans/credit cards.
Theres also the potential of an IVA, although setting up individual payment plans may be better. I would speak to a financial advisor about this.
I think that if you pay her debts off then she’ll just end up in the same situation again. Maybe you could support her by doing food delivery shops when she’s struggling? I would keep encouraging her to get help to get on top of her spending, and then maybe in the future you could consider helping her pay off the debt, but only if she’s in a position where she won’t end up in the same situation.

Yes this may be a plan. I think that could be a good step - she’s earning not very much at all at the moment and it’s easy to see how the day to day things spiral. Getting her a job, clearing off the overdraft and finding some time to go through this all could be helpful.

I also think the best help you can give her is to signpost her to step change and help her budget.

Is she finishing her masters now and jobs hunting?

Doesn’t she currently live at home though? So actually if £1200 is actually all of her disposable income then it’s a LOT of money- more than most people have spare after they pay their bills!

I can understand having debt if you earn £1200 and are having to fund rent, bills, food shopping, kids etc, but for a 23 year old living with mum and dad- no, it’s a crazy amount of debt.

If you bail her out, you've just given her a clean slate to keep spending OP. It's up to you though.

Is that possible? I will help her get in contact with them. I just want to give her a hug. I remember being younger than her, telling her parents I was pregnant and the absolute anger they gave me for that. I can’t imagine being her right now and knowing her parents could blow up at her.

Don’t bail her out or let her move in with you! If you do, every penny she spends on doing her nails, buying a new top, etc you’ll resent. Also, she won’t learn.

You say you can ease it. Are you planning to pay it off and then she pay you back? What happens if she racks up more debt? She needs to take responsibility for her actions.

Don’t let her feelings of failure manipulate you into taking action you will later regret. Her debt is her responsibility, not yours. Do you think she’s telling you so you can wave the magic wand and pay her debts, and let her off Scott free?

The answer is she needs to make grown up decisions, which may mean giving up her masters. She needs to consolidate her loans - maybe a low interest loan , and work out a budget. Cut up all the credit cards.

https://www.moneysavingexpert.com/banking/budget-planning/

Look at this article; lots of good advice, tips and tools.

I agree.

I was like this at university. I still have tendencies now particularly when under stress or low in mood. I was diagnosed with ADHD in my 30s.

She has to get herself out of this, otherwise she will not learn. If you clear her debts it just gives her a clean slate to start from again and rack up more debt and I say that as someone who has been there, done it and come out the other side.

ADHD has come up a couple of times, I’ll suggest this to her as a root cause

She's going to do that and lots of people have suggested it. OP says SIL is "very unwell" so the GP is not a wild suggestion, they deal with addictions all the time.

If you clear her debts she will start racking them.up.again!

I am sorry you are coming across as very naive and your sil sounds very immature. I am concerned that you are going to cause great harm just because you are feeling flattered that she asked you for help rather than others.

Firstly, you should not lend her money nor can you hide it from her dh. She needs to swallow her pride and seek help, debt services, therapy, etc.

You say that you are going to be able to set her up with a job but be honest, is she going to get a high paid job that would cover rent in London etc. It is all well and good saying that she can move in with you and that she is a nice girl etc but how will you feel about her bring guests home, sleeping with them etc while your children are in the house.