Our way of getting out of debt, but not yet!

**MomToTwoBoys** · 02-06-2009, 08:31 PM

I had a nice talk with DH earlier and he proceeded to tell me about how his dad is looking to start his own business, contracting out for TCPL (TransCanada Pipelines). After DH explained all of what would happen, he told me that FIL is willing to give us the money that we have to pay off debt and then have us pay him back in interest alone. We pay $187 per month in interest alone, so this would save us a ton of money. We'd be paying $2200 a year back on the debt and then the rest of our money is free to put into savings for a three to six-month living expenses fund. DH would also be one of four employees so it would sort of be a second job for him.

DH would be opening another joint checking account with his father so that it'd be easier for FIL to pull that payment out of the account and transfer it into his own account. Repaying the loan to FIL would be easier than repaying the loan to either VISA or Mastercard.

DH waited to talk to me about this because he knows my feelings about being loaned money from family. After we looked at how much interest we're paying and how much more we could put into a larger EF, I'm ok with it. So it looks like our days of paying large debts with interest will soon be over.

**homesteadmamma** · 02-06-2009, 09:54 PM

As much as I hate to say this, get it all in writing. Doing these types of things with family can turn sour very fast.

I truly hope it all works out for you, I do. You will save lots and that's a great thing.

**missmanny** · 02-07-2009, 02:35 AM

It sounds good, but I think that you are right to be cautious about mixing business with Family.

It sounds like it could be a great idea for you think long and hard and do what is right for your family.

What a generous offer.

**rainbowgc** · 02-07-2009, 03:32 PM

I agree get it in writing but after that all I have to say is: YIPPIE!

**idodna** · 02-07-2009, 04:31 PM

That's a really good point about getting something on paper - that should be to protect BOTH of the parties - so no worries about hurt feelings - good luck - I hope things work as planned!

**Michelle** · 02-07-2009, 04:42 PM

Originally Posted by missmanny

It sounds good, but I think that you are right to be cautious about mixing business with Family.

It sounds like it could be a great idea for you think long and hard and do what is right for your family.

What a generous offer.

:agree: after years of loaning money to family, I can honestly say that it really can sour relationships.

I hope that's not the case for you because that sounds like a great opportunity to be debt-free

**lisettelovebug** · 02-07-2009, 11:44 PM

I have lent and been lent money in the past from family. I lent my brother $175 some years ago and never got it back. But there was a lot going on in his life at that point (he left his wife) so I got over it and it doesn't bug me anymore. We were lent $1200 by dh's uncle so that we could get the land transfered over (lawyer fees and such) and we will be repaying it back when we get our income taxes. We had told him we would start paying $50 a month until we got them back, but he wouldn't hear of it. Told us to wait until we had the house in. Even though we won't have the house in yet when we get our refund, he is getting repaid, whether he likes it or not! lol.

I agree that you should get it in writing just for everyone's well-being.

**Luv2BeFrugal** · 02-08-2009, 03:19 AM

Yup, get it in writing...and then celebrate!! Hooray!! That will sure help things a LOT!

**Greebo** · 02-08-2009, 06:56 AM

I wouldn't do it. Not in a million years. Not if you want Thanksgiving dinner to taste good this year.

Business + family should not be mixed.

**Marie78** · 02-08-2009, 10:35 AM

I hope it works out for you. I agree that you have to be careful with family. You never know what they are really thinking. It sounds like a great business deal, but please make sure you get it in writing.

When I was first out on my own I had less than $2,000 in cc debt. I asked my mom if she would help me by paying the debt upfront and I could pay her back the $2,000 with less interest then I was paying the bank. I was fresh out of college and had rent, college loans, car loan, car insurance, and what felt like the weight of the world on my shoulders. She agreed and then when it came time to help me she became enraged that I would ask her to help me (at the time I didn't realize how much debt she was in herself and she thought my debt was minor in comparison). I ended up with no help and paid so much more back in interest on that $2,000. Of course over the course of a few more years I had dental work that more than tripled my $2,000 debt and with interest felt like an impossible amount to repay. I am almost debt free now, but I realized at a young age that family does not always have your best interests at heart.

**MomToTwoBoys** · 02-08-2009, 11:31 AM

I did a lot of thinking about it since we had that talk.

If this was my family, it's be a national catastrophe and relationships would go more sour than they are now.

DH's family has been really awesome to us when we needed it. They gave us the $13,150 for the house downpayment and have been pretty good to us. They gave us the $6,000 for the van's purchase and FIL wrote that off when he stayed with us for a year as he was contracting to TCPL before. He made $150k in that one year alone, figures that with him staying here for all that time that he used up the $6k in both room and board.

He saw the budget that DH had set up for us and how awesome we've been at repaying the debts. I think that's what prompted him to come to us, offering to lend us the money to pay off the rest of the debt. FIL would be pulling this money from this Mad Money Account, which has roughly $36k in it. DH says that FIL can't spend that much out of it (even with buying a truck, quad ATV, etc) and (in DH's words) "he has so much money that he has no idea what to do with all of it" (yes, this sort of makes me feel weird coming from a family that's been broke in their retirement). FIL knows we're good for it and we always have extra money left over.

I understand everyone's trepedations in regards to this. I'm still a bit reserved but DH knows that and wouldn't go into it without me being ok with it.

**McD** · 02-08-2009, 11:42 AM

I think as long as you have it in writing with a clear repayment plan it would be great.

My father lent me about 6K many moons ago, the repayment plan was approximately set over a course of 5 years but I had him paid back in less than 2. It didn't sour our relationship at all.

**Marie78** · 02-08-2009, 03:51 PM

MomToTwoBoys, your Dh's family sounds awesome. If your FIL has that kind of money and is offering then I would take the opportunity.

**Scattymum** · 02-09-2009, 02:40 AM

if you are sure then i would go for it, i agree to get it in writing for all parties sake! thats great you have the oppertunity to pay him off without interest!!