Never loan money to a relative

[May47]

What is the name of your state? New York

My mother-in-law lent allot of money to her Son (my brother-in-law)so he could buy a new house and new car. They signed a loan agreement but only her Son and his Wife kept a copy. Every time she tries to get a copy for herself they come up with an excuse. They were supposed to pay her $500.00 per month and they don't. She has to call them to beg for money to buy food and medication and they always come up with an excuse of why they don't have it. Meanwhile they are re-doing their house and buying new furniture. She feels very stupid because she trusted them and now she doesn't know what to do. Does she have any recourse? The agreement was not notarized.

 

[Betty]

How much was loaned - what is a lot of money? It's hard sometimes for a parent not to loan money to their children but they never should if it is money they cannot afford to lose. I know it's also hard for a parent to insist on a formal notarized agreement listing the amt. of the loan, the terms of repayment & any interest to be paid. The parent feels their child will think they don't trust them. Your mother-in-law can contact a lawyer for suggestions - they usually don't like to do this or take their own child to court to see if they can get repayment. Family loans can cause a lot of hard feelings & friction in the family. It would help if your mother-in-law could get a copy of the loan agreement that was made up even though it wasn't notarized in the event she does take this to court. Sometimes without something "formal" courts look upon it as a gift when one family member "loans" (gives) money to another.

 

[StickyFingers]

What is the name of your state? New York

My mother-in-law lent allot of money to her Son (my brother-in-law)so he could buy a new house and new car.

How much is a lot?

They signed a loan agreement but only her Son and his Wife kept a copy. Every time she tries to get a copy for herself they come up with an excuse.

Hmm...Sounds like MIL made a bad move...It will probably cost her..big time.

A lesson learned.

They were supposed to pay her $500.00 per month and they don't. She has to call them to beg for money to buy food and medication and they always come up with an excuse of why they don't have it. Meanwhile they are re-doing their house and buying new furniture. She feels very stupid because she trusted them and now she doesn't know what to do. Does she have any recourse? The agreement was not notarized.

Sad story. And I do feel bad for MIL....but the fact remains ( by the information givin in your post) is that she has no proof of any agreement between her and her son...or anyone else for that matter.

It is her word against his.

Seems like it would be possibly considered a 'gift'.

 

[TigerD]

If they attempt to claim gift, have they paid income tax on it?

 

[May47]

Never lend money to a relative

New York

They didn't attempt to claim gift. They just pay her the smallest amount ($10.00) when she comes begging for money so they do know that they owe her.

 

[TigerD]

She needs to talk to an attorney about foreclosing on the house.

DC

 

[Ladynred]

If the MIL doesn't have a lien, how can she forclose ??

 

[TigerD]

If the MIL doesn't have a lien, how can she forclose ??

Hence the purpose for visiting an attorney.

There is no advice that can be given on this online -- the creditor needs to get this to an attorney asap.

DC