What should we do here?

amother

Royalblue

Tue, Jul 12 2016, 11:03 am

DH and I always wanted to be self-supporting and not relying on parental support while he was in kollel--and b'derech hateva, we had the means of doing so. Life circumstances beyond our control and obviously as a result of ratzon Hashem forced us into debt and my brother who's been in charge of my mother's finances, suggested that we tap into my mother's home equity loan, which was initially taken out to help pay for my wedding. We borrowed a large sum initially, and we've tapped into it in times of dire need, and the loan was used for other of my mother's expenses as well. We signed a "heter iska" so that we'd be paying the interest to the bank instead of my mother. When that document was signed, we did so fully intending to help pay it back, but on "indefinite" terms, and we had an auto-deposit system worked out that would pay back nominally each month--but admittedly didn't keep most careful records hoping that we'd be paying back the money in short order. In the back of my mind I kind of suspected that as long as we were achrauy to the bank we needed this "heter iska" for paying the interest but if the house was sold, we would just assume that my mother would forgive the loan.

When my mother had her full faculties, she always told me, her baby, that if she had the money she would support us, that if we need money and she has it she would give us etc. I know that if I would ask her to forgive the loan--she'd do so in a heartbeat
Now she's mentally declining, and her house was sold--I'm sure if I'd ask she'd forgive it, but she also needs money for her eventual care.
My brother said that we need to "repay" the loan we took out, or roll it into a "Gemach loan", so he wants me to calculate what we owe. Just the thought of that number is making me sick.

Every time we've come into some money meant to pay down the debt, something else comes up and we need to take that money and put it towards new expenses. It's driving us nuts. We have SO many expenses that we feel that we'll never catch up, and it just doesn't seem to be the ratzon HaShem for us to have the money. We are 30 years old, we've been living in "crisis mode" for about 5 years, and not a penny saved towards a house--not to mention we will need a "new" minivan when ours finally dies, my shaitels could use updating, our couch is in bad shape, and we are hoping to move and need moving expenses.

I discussed my situation with my sister, who's been aware of our struggles, and she said that she'd speak to my brother and she relayed back to me that this figure is only for "someday when my mother needs us to help her out". None of my siblings are well off, but they are at least somewhat "holding their own." However, my brother keeps asking about this "number"

I'm looking at these bank statements trying to make heads or tails of it--trying to figure out what we paid, what interest is for us and what is for my mother, dealing with a varying interest rate over the course of 2 years and her deposits and transfers etc. All the while, not knowing when we'll ever have enough money to pay this back. This loan was a savior when we needed it, but now its turned into a nightmare.

Why can't he just allow this debt to be forgiven by my mother, so that we can try to get back on our feet? Or is that taking advantage? (The sum is probably in the ballpark of $8,000 and we still have credit card debt) but he wants a more precise figure which I can't figure out how to calculate.

BetsyTacy

Tue, Jul 12 2016, 12:11 pm

If you are looking for help and not just to vent, I would ask your brother to help with the numbers. Bring all of your records and ask him to help you figure this out. This way, when you both arrive at the number, he will be satisfied that you tried your best, and will not wonder whether any creative/wishful accounting was done. As far as repayment goes, he and the rest of the siblings seem justified in asking that your mother's money that is needed for her care be repaid. Hopefully you can work out a feasible timeline to do so.

LittleDucky

Tue, Jul 12 2016, 12:12 pm

I am sorry you are in a situation like this but you borrowed money and should repay it. I don't mean to be harsh. It's difficult when money and family get mixed together...

What will your mother live off of in the future? If she needs the money for care or nursing home will it be there? After 120 it will lower the amount of inheritance everyone gets. Your mom may have forgiven it but should your siblings? And your mom didn't say she would, you "assumed she would". Especially when it doesn't seem like the siblings gave permission for their yerusha to be used like this?

You have been using this loan as a safety net or extra income.
Just because you have other debts is not a good excuse- some of what you mentioned are extras and aren't needed. If you look crazy hard at your finances, I am sure you can find where to cut out $50 or $100. Send it immediately to pay it off. Don't update your sheitels. Don't buy a new couch. If it worked last week, it will work next week. A key to financial stability is spending less than you make and saving for big purchases, like the couch. But first pay off debt!

SRS

Tue, Jul 12 2016, 12:34 pm

You counted your chicken before it hatched when assuming that your mother would forgive this debt. You must repay this for shalom with the siblings.

Start by making an inventory of all of your assets(any money you have anywhere or anything you can sell for money that you aren't using) and all of your liabilities (this HELOC, the credit card, anything else you owe).

Once you know what you owe to whom and when, figure out how much you can repay your siblings each month. $135 a month over 5 years would do it.

It sounds as if your husband does not work. He needs to go to work if he has not already. I'm not sure how much you are working. Both of you can find some side jobs to speed along the process while you reign in the other spending and get yourself into the self-supporting situation you want to be in.

tichellady

Tue, Jul 12 2016, 12:35 pm

This sounds like a hard situation but I agree with the others that it's not fair to your siblings to burden them like this. It would be one thing if your mother just gave you the money, but she didn't, she asked for a loan. Are you and your husband both working? Is he still in kollel?

amother

Sapphire

Tue, Jul 12 2016, 12:44 pm

I feel so sorry for you as I've been in a situation were the financial burden felt to much to bear, but I have to agree with the previous posters. A house after 120 years will be the yerusha for all you and your siblings. How would it be fair if 1 siblings tapped a chunk off by way of borrowing against the house and now everybody has less to split? If everyone agrees to be mochel it, then that's another story. Otherwise you essentially borrowed money from all your siblings as they stood to yarshen the full value of the house after 120.

Mrs Bissli

Tue, Jul 12 2016, 3:54 pm

OP, if you are familiar with Excel, you can calculate easily how much monthly payments are needed. The formula is =PMT(interest rates, # of months to pay off, the loan principle). If you're loan is accruing 3% and you agree to pay off $8000 over 4 years, it would be =PMT(3%/12, 48, 8000) which gives $177/month. If you can stretch it over 5 years, monthly payment would be $144. Hatzlacha.

out-of-towner

Tue, Jul 12 2016, 5:10 pm

amother wrote:

I just have to comment on the bolded. I hate to be the bearer or bad news, but in this day and age with the cost of medical care, it is very possible and even likely that there will be nothing left of OP's mother's money to go around. Many, many people leave this world with all of their assets used up due to the cost of end-of-life care. There is no guarentee that anything will be left at all!

OP, I don't know how to advise you other than to make sure that your mother's finances are in order ASAP. Even if she has the mental capacity to be mochel the money, she probably won't be fully aware of how much she may need that money in the future. Please don't leave her in such a mess, it will only hurt her and make your siblings resentful of you.

Hatzlacha!

HonesttoGod

Wed, Jul 13 2016, 11:22 am

Is it just me or was there a post like this about a year ago or so? I remember reading something like this...

kollel wife

Wed, Jul 13 2016, 12:15 pm

If you want all of your mother's finances not to go to her care, it's worthwhile to speak to a lawyer or financial advisor who specializes in these things.

(this is answering the one who said all her money will go to her care. There won't be any left.)

A fund can be created, I think, where she gets income from it, but no longer owns it. Then the children can inherit it, but she can be eligible for adult Medicaid which covers assisted living or nursing home if necessary.

amother

Sienna

Wed, Jul 13 2016, 12:54 pm

kollel wife wrote:

We tried to do exactly similar thing, but BIL's rabbi was against it because it is like embezzling Medicaid when there's still assets to pay for the care.

allcuteonesrtak

Wed, Jul 13 2016, 1:09 pm

amother wrote:

We tried to do exactly similar thing, but BIL's rabbi was against it because it is like embezzling Medicaid when there's still assets to pay for the care.

actually, there are ways for it to be legal.
I researched this in detail for a friend

amother

Ecru

Wed, Jul 13 2016, 1:41 pm

from the beginning of your post I was thinking the debt owed to your mom/brother was over 100k. then I saw you wrote 8k.
I know 8k is a lot also but definitely not as hard to pay back if you do it slowly.
dont get all your siblings involved over that amount.
try to pay it back and start now and youll be paid up in 5 years.

tichellady

Wed, Jul 13 2016, 1:58 pm

amother wrote:

Same here. Not to say that $8k is nothing, because it's not, but its not a crazy sum to owe either. Good luck!

sourstix

Wed, Jul 13 2016, 2:02 pm

I'm just gonna answer something that is somewhat similar but not. Take it as you wish. I was in 10,000$ cc debt. I couldn't see myself getting out of it. We changed the way we live. A family member paid off the cc and monthly dh paid this family member through bank payment going straight to his account. It took us about 3,4 yrs. and bh" I'm done. Now I don't use cc. I buy only how much money I have. Whatever I don't have I don't buy. Ob been doing this for a couple of yrs. I use used clothing and live the best I can with what I have. It's not always fun. Far from it. But I don't have debt. It's the best feeling not to owe anyone anything. It feels great!
Don't think it's not doable. You need to reset the way you spend. See how much you have(income) and figure out what you can get. Oh my sheitel gets washed once a year sometimes twice if I'm lucky. It's better to live in your means and be humble then to owe everyone.
It's a problem today that people who live within their means are not looked up to. Only if you drive a fancy car or live lavishly then people have respect for you. It's a screwed society. Don't buy into it. It makes people miserable. You can never be happy that way. Living within your means is the most satisfying feeling. Do what's right and you will succeed

sourstix

Wed, Jul 13 2016, 2:06 pm

And if you were my family. And lived within your means and paid debt. I would have a lot of respect for you. And would lend you money based on your honesty. It's a win win.

jerseygirl

Wed, Jul 13 2016, 2:59 pm

It's too late to say that your mother would have forgiven the loan. She didn't and it's not fair to your siblings to assume that she would have.

I would calculate how much the loan was for and ask your bother if it can be deducted from the eventual yerusha. Takes the stress off of paying it back, but still fair to your siblings.

Also, agreed with the above posters - 8k is doable if committed to paying it back.