Family loan has potential drawbacks
My father-in-law wants to help us with our mortgage. Weíve been working hard to pay off our home early, and weíve reduced what we owe to around $35,000. His idea is to pay off the remainder, then let us pay him back over time. In the past, he has loaned us much smaller amounts and everything has worked out fine. What do you think about this?
Iím sure this seems like a winning proposition all the way around. My concern is thereís a big spiritual and emotional issue that has been left out of the equation. The borrower is always slave to the lender, and nowhere is that more true than in a family.
I understand, too, you have a solid track record with this kind of thing. But anytime you borrow money from family youíre playing with fire. When you do something like this, especially with such a large amount, the money issue is likely to be a shadow hovering over your relationship. Family get-togethers, special events, and holidays will feel different when youíre there with your lender instead of just good old dad.
I assume your father-in-law is doing well financially, since he can afford to make this offer. And donít get me wrong, itís a very kind and generous offer. If I were in his shoes, I might offer instead to pay off the mortgage as a gift to my son and daughter-in-law for working so hard to attain a goal. But it would be a gift. No strings attached.
If you have a nice, stable family, this debt will always be there in the back of your mind. If you have a dysfunctional, control-freak kind of family, itís going to be right there in front of you constantly. Either way, I donít think itís worth the risk.
We recently learnt that my wifeís ex-husband used her social security number to establish several credit card accounts. Weíve written and called the credit card companies, and weíre disputing the charges, but is there anything else we can do to protect ourselves and put an end to this?
You bet there is! File a police report immediately, and if possible, have this guy arrested. He has committed criminal fraud, and itís not something you should take lightly. Also, put a fraud victim alert on your credit bureau reports today.
Donít stop with just alerting the credit card companies about this situation. You should be speaking with and communicating via e-mail ó plus snail mail, if necessary ó directly with the fraud victim division at every credit card company involved. Make sure they understand this is a denial of responsibility and not simply a dispute.
Let them know youíre sorry this happened, but explain that all these charges in your names are the result of a criminal act perpetrated against you. You may have to stand your ground with the credit card companies, because some of them might try to get you to pay it, anyway. Donít do it!
ē Dave Ramsey is CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey