Morally complicated money/relationship question

[James_0011]

I don't know anything about all this, but I do have a good hypothetical for the wise people of this thread.

What if everything was the same except they were married? I imagine that would further complicate things.

Personally I would never tie my finances to another human , I am too skeptical of marriage.

[halfmoon]

Maybe I missed it above, but did anyone suggest actually going full crowbar and having her pay those loans off? If it's 40-50k total, it could be done in a year or three of crash course living. 11% really means getting rid of it ASAP, no minimum payments but maximum payments.

I'm going with the assumption that it's much more. As I understand, that was the initial amount on which little or nothing was paid, a high rate of interest (and undoubtedly late charges) applied, and one or two additional loans were taken out? The first step is to fully define the problem: exactly how much is owed in what types of loans, at what interest rates. The type of loan matters, since bankruptcy will only discharge student loans if undue hardship can be established.

@M741, I re-read the second half of your journal looking for insight, and I was reminded that you're planning to quit your job in July 2017 and travel for a year with your girlfriend. Not to be nosy, but how will she continue to make payments on her debts without a job?

I don't know anything about all this, but I do have a good hypothetical for the wise people of this thread.

What if everything was the same except they were married? I imagine that would further complicate things.

I've worked with a number of clients who went through bankruptcy (or years of financial stress to avoid bankruptcy) after divorce. Often the financial issues were a huge factor in causing the divorce. Financial compatibility in a marriage is IMHO every bit as important as emotional compatibility (otherwise known as love ), because lack of the former can derail the latter. People are often surprised to learn that responsibility for credit obtained jointly (mortgage or consumer credit) can't be assigned to one party or the other. The couple may agree between themselves as to who will pay it; a divorce court may even rule on who will pay it; but that is just between them. The original lender has no requirement to let a debtor off the hook for the entire debt, and they pretty much never will.

I also noticed that none of us (except maybe Jacob) really addressed the question at the end of your original post about how to repair your girlfriend's credit. If you won't see a bankruptcy attorney, you should at least see a non-profit credit counselor. No one can properly advise, however, until you have a detailed list of all loans and terms.

Most importantly: do not try to repair your girlfriend's credit with yours. The temptation will be huge to use your savings to consolidate her debt, or to cosign something. I can't urge you enough not to do this.

[Scott 2]

The more serious your relationship gets, the stronger your relationship to the mother. Even if you avoid legal/financial ties, emotional ones could force you into her problems. Is the rest of your relationship with the girl worth it? How much of your resources are you willing to expend? The pattern is not going away until the mom is dead, and even then, it could appear in her other relationships, especially familial. When you marry, you're in the family, so to speak.

The mother is wrecking her child's credit and saddling her with debt, despite having an income. There's not a gray area here. The daughter needs to recognize it and break the financial ties. Lock credit, don't sign anything else, etc. She has to get off the loans and any other joint accounts, whatever it takes, even if bankruptcy. There is no cap to the amount of damage her mother could cause. I highly doubt the daughter is willing to take legal action, so she must take preventative measures.

Once those ties are severed, it's up to the daughter to decide what sort of economic assistance she wants to provide. She needs to feel the pain of providing that support - not you. If she wants to sacrifice to provide economic assistance to Mom, doing it with her and sharing the pain, could be ok. Of course, save your money for future consumption.

For me personally - in your shoes, I would not lend money or gift money to the significant other. I have tried both. In my experience it creates a bad power dynamic, one that leads to resentment against the person trying to do something nice. If you do want to transfer some wealth, I'd treat for meals or trips or events or even buy random presents. Create discrete events where you make her life better in the moment, with no expectation of recurrence. Consistent, reliable patterns of support quickly end up taken for granted.

[IlliniDave]

I won't be much help. I would just plain run away from this situation. But I am not a good man.

[George the original one]

The morals of this situation are not complicated. The emotional ties are what make it complicated.

The finances have to be separated... definitely credit freeze, maybe loan consolidation? bankruptcy? I don't know what it takes to get out from under cosigned loans unless you can prove fraud and that gets emotional in this situation.

[Toska2]

I guess I'm wound tighter than IlliniDave. I cut ties when the role was reversed. The daughter was the recipient of a degree from her lower middle class parents. I was in a such state of shock when she said, "Art History" that I ended the relationship over the phone right then and there.

The dynamic is still the same. The family had been living in a reality that I didn't want to be a part of.

[steveo73]

I wouldn't get involved at all dude, sounds crazy. Also, consider that all relationships are transient, will you even be dating this girl in five years??

I agree with this 100%. Separate your finances as much as possible and I'd even consider the relationship that you are currently in. I'm married with 3 kids. One thing that I think can destroy any relationship is being married to someone who isn't financially responsible and that includes getting into a situation ala this thread.

[m741]

Thanks all, still trying to gather information. Really appreciate the varied perspectives. Separation of finances, Frank discussion of values, discussion of mother's retirement plans, and no further loans are all probably in order.

Will update in a day or two when I've got more info and with the step I've taken, in case others have a similar situation.

[Dragline]

I don't know anything about all this, but I do have a good hypothetical for the wise people of this thread.

What if everything was the same except they were married? I imagine that would further complicate things.

Then you are looking at joint marriage counseling, and separate all the joint accounts in the meantime. You may need to separate the accounts before the counseling can occur.

But you should not marry someone like this, and these things ordinarily do not just start up after a marriage.

The kinds of things that start up after marriages are addictions, both in the substance abuse realm and shopping/excess spending.

[Riggerjack]

Relationships are relationships, and money is only money. Each needs to be examined for what it is.

Your GF has both relationship issues with her mother, and money issues. It's up to you whether either is a deal breaker for you.

Therapy could help her, or not. Bankruptcy could help her, or not. Really, you have to decide for yourself how committed you are to seeing this resolved. People only change when they are ready to.

That being said, I wouldn't recommend getting your money into that situation any further. Unless you are comfortable losing it. I don't say that to be facetious, there are situations and relationships in my life where money goes to die. I am aware of this ahead of time, and it doesn't bother me. Money is only money. However, that's not who I come home to every night, either.

Money problems are the biggest cause of stress in marriages. So I would need this fixed to get more serious. Putting it in those terms may help in addressing the issues, but only if that is where you are at.

However things go, good luck.

[m741]

We talked. Here's a few things that came out:

- The loans were all student loans (this according to her mother). Apparently her parents agreed to cover some percentage of her college expenses, couldn't, and took out loans in both their names without telling her. Then the mother lost track of the loans (or stuck her head in the sand). Then, the gf started finding out about them when mail came, debt collectors called, or she couldn't get a credit card. The latest round was after I told her to get a credit report, which I think has uncovered everything remaining.
- I don't know if these are actually 'student loans' or just general loans. I encouraged the gf to look into things (figure out total college expenses, and see how much was taken out in loans) and I think she will. I think something is fishy here, and I think we both want to find out. Depending on the results, I will suggest a credit freeze as @DutchGirl suggested.
- I think the two of us are in agreement about her mother's very bad and maybe dishonest handling of the situation. I don't think she has serious parent issues, but rather is in shock about the whole thing.
- At no point has the gf every suggested I should cover anything. I think it makes her uncomfortable (me too!). I don't think the mother is aware of how I'm helping at all - will check with the gf about that.

Here's what we're doing (mostly her):
- Finding out what the actual accounts are, what their interest is, minimum payments, etc.
- Seeing if there are options for consolidation or refinancing (talking to advisors).
- Seeing if bankruptcy is an option (seems unlikely, but depends on whether these are actual student loans).
- I am helping her figure out a payment schedule and how to attack these, and also how to save money, ERE-style. She seemed amenable to this. She's already putting the majority of her income into these loans.
- I am not volunteering to make any additional loans at this point, but I did insist she halt her payments to me, for now. Some of the outstanding loans are 10% interest and I want to see those taken care of before she puts money to me. I'm comfortable if I lose all of the money I have already loaned.

Suggestions or pointers for debt resolution welcome. It's a new area for me financially.

[BRUTE]

dave ramsey snowball method is popular for the psychological effect - paying off smallest loans first to "make progress" faster. it's more effective to pay off highest interest first instead, but the psych benefit of snowball might be greater than money saved.

[DutchGirl]

I can recommend the website http://unbury.us to "easily" play around with the debts and for example see what an extra $100 per month put towards them can do. (Or what a change of interest rate can do). Here's a link to an example with three different debts. The link always contains all information that you added; that's the way in which you can save a particular scenario.

One downside: the website only understands regular monthly payments. You cannot put in that say in March you want to pay down $800 more due to the tax refund that you'll get then. But of course, if you are thinking about adding an extra amount of money, you can at that point in time fill in your new situation on the website and compare with the previous situation and see how much you'll profit from that extra payment.

[BlueNote]

My girlfriend is almost pathologically nice, and she otherwise gets along with her mother great - they're confidants, talk every other day, etc. She's frustrated about this, but from my perspective, doesn't really understand how bad it is.

How would _you_ handle this situation?

I'm not a financial or relationship wizard but I have saved up a lot of money in a short period of time while being married. If your SO keeps this up you're probably going to experience a large and unpleasant dose of cognitive dissonance due to the fact that your hierarchy of values are different when it comes to relationship harmony, personal ethics, and personal finance. It sounds like your forcing yourself to go along to get-along. A wise person once said something like: A good marriage/LTR(long term relationship) is better then no marriage and no marriage is better then a bad marriage/LTR. Having been the child of divorce and having been through some bad LTR's I agree 100%. My current wife is fantastically well adjusted financially and would never allow something like what you're SO is going through to happen, her parent(s) in that case would probably go bankrupt or have to do some major restructuring of their lives. To answer your question I would show my SO the financial line in the sand and explain that if she crosses that line the relationship becomes bad for me and it would be better for all involved for it to end so we can find better matches.

[Scott 2]

I think it's awesome you Immediately addressed this head on, and are following through with a resolution. A lot of people would ignore the mounting problem while it eroded their quality of life.

[Sclass]

I won't be much help. I would just plain run away from this situation. But I am not a good man.

Yeah I'd do the same. I'm not only a bad man, I'm old enough to have seen this kind of thing go sour for my friends. You cannot fix ALL of it, which is necessary if you're going to have an LTR.

In fact I cut off a dating situation when I discovered the gal I was taking out had what was rumored to be $30k + in credit card debts. This was in 1990 on top of that. Our last date was in a fancy restaurant she liked. I just let out "your debt is like a big wart on the end of your nose. I know you think you're beautiful and you are, but in my eyes I see a big old wart right over there." I pointed my finger at her nose. "Tell me what you owe or no more dates."

I didn't see or hear from her for a few months. About the time it took for her latest BF to lose interest. I brushed her off and it happened again six months later.

Wow, these threads are reminding me of all the land mines I sidestepped just by being my ugly self. My current SO is the shopkeepers daughter. We were a good financial match.

This kind of thing is a big business deal. It is going to be one of the most financially influential choices you will make when you're young. I never saw it this way as a kid but thank God I just got lucky.

I always had the discrimination filters set a couple of dB high. Recently I read an article in Elle complaining about cheap boyfriends and I definitely fit the bill. Yeah I scared away some Elle readers but I got my appropriate match.

Good luck M7. You sound like a really nice guy.


Edit - don't feel bad about walking away from your loan to her. That shouldn't stop you if leaving is what you want to do. Think of it as a little tuition for some schooling. It is way less than what you might be in store for.

Ohhh, I feel an Sclass story coming on. I was home from college one summer and the door bell rang at 12am. It was my doper family friend covered in little twigs and dirt. He explained to my dad he'd spent the season in Mexico harvesting pot. He'd snuck across the border (no fence in 1989 ) but got robbed and lost all the harvest he intended to sell in LA. He asked to sleep on the couch. Mom refused. He asked to sleep in our yard. Mom refused. Dad felt bad and gave him three twenties for a motel. He disappeared into the darkness. Mom complained to dad that we'd never get that money back..."you'll never see him again."

Dad: "Exactly."

A small price. Dad knew I secretly admired that pot pirate. $60 was a small price to pay to guarantee no return.

[pukingRainbows]

I don't see this ending well.

It sounds like you are trying to fix their issues. It's nice to be supportive, but I think you need to back off and let them figure it out. It's really their relationship and it's up to them to fix it. Or not, and you can decide whether you still want to be a part of this situation or not.

This dynamic will probably continue long after these debts are paid.

So to answer your question: I would leave.

Basically, because I've been there and it's better to leave before it gets ugly. Of course, if you are like me, you will need to earn that wisdom with a few scars.

Anyway, good luck!

[DutchGirl]

@m741: by the way, if some of those loans are Parent Plus loans, know that these are loans that are the responsibility of the parent, and not of the child. The child is never responsible for these loans (legally), and when the parent(s) die, the loan also dies with them.