Do I Sue My Brother-in-Legislation for $92K I Paid to Save His Dwelling?

man looks over contract to pay back money
Pricey Penny,

My brother-in-law’s residence was being foreclosed on. I had cash that I might entry in an annuity account, so I paid the home off so they would not lose it.

We’ve got a signed settlement that he pays me, however he has not paid me something since final 12 months. He nonetheless owes me over $92,000. I principally gave him a $100,000 interest-free mortgage.

I do not wish to should sue him, however his spouse would not suppose they need to should repay me. I’ve now misplaced over $50,000 in dividends that may have been accrued on my account along with the cash they nonetheless owe me. Please assist.

-Unfortunate in Kentucky

Pricey Unfortunate,

You probably did a very type factor by saving your brother-in-law’s residence from foreclosures. In an ideal world, your brother-in-law can be motivated to repay you out of gratitude. However in actuality, lots of people who lend cash to household get the very same thanks you’ve gotten.

Give it some thought from the borrower’s perspective. Think about if banks by no means sued anybody for failing to make funds. What if irrespective of how late you bought, they’d by no means cost you a price or curiosity on prime of curiosity? How a lot debt do you suppose would go uncollected? 


That’s typically how the scenario seems to be from the borrower’s perspective when a member of the family lends them cash. There aren’t any penalties in the event that they don’t pay it again. On prime of that, since you’re well-off sufficient to supply monetary help, it’s simple for the borrower to inform themselves that you simply don’t actually need the cash.

The excellent news is that you simply had the foresight to make your brother-in-law agree in writing to pay you. However an settlement solely has tooth in the event you’re prepared to chew. If in case you have any hope of recouping this cash, you might want to flash your tooth. Your brother-in-law and his spouse clearly don’t consider you’ll maintain him to the settlement he signed. 

Current them each with a replica of the settlement. Inform them that you simply’ll don’t have any alternative however to take them to courtroom until they resume funds. In case your brother-in-law is the sibling of somebody you’re presently married to, your partner must have this dialogue with you. Rent an legal professional to ship an authorized letter demanding fee in the event that they nonetheless refuse to pay. 

I’m hoping you gained’t really should sue right here. However nothing on this scenario will change until your inlaws see potential penalties for not paying you again.

Taking your brother-in-law to courtroom could also be your solely hope of getting that cash again. You clearly care about your brother-in-law in the event you had been prepared to repay his mortgage. If the connection isn’t already broken past restore, you’ll must weigh how necessary the connection is to you versus how a lot you need your a refund. 

Sadly, you additionally want to arrange for household drama if a lawsuit is critical. Hopefully, others will perceive that this was not a present, however slightly, a mortgage that you simply had been beneath no obligation to make. However some folks will most likely see you because the unhealthy man for suing your loved ones, particularly in case your brother-in-law and his spouse are nonetheless struggling.

I feel you might want to plan as in the event you gained’t be getting this a refund. Lawsuits can take a very long time to resolve. Additionally, accumulating on a judgment could possibly be troublesome in case your inlaws are useless broke. Getting them to comply with pay one thing every month, even when it’s lower than what you agreed to, could also be a greater consequence than taking them to courtroom.

The traditional rule for lending cash to household and mates is don’t do it until you’ll be able to afford to make it a present. You’re actually not the primary particular person to be taught this lesson the laborious approach.

Robin Hartill is an authorized monetary planner and a senior author at The Penny Hoarder. Ship your difficult cash inquiries to [email protected].


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