An in-law loan goes bad

DEAR READERS >> Because of syndication scheduling, I write and submit my columns two weeks in advance of publication. Due to this time lag, the Q&A’S will not reflect the latest information about the worldwide COVID-19 pandemic we are currently facing.

DEAR AMY >> I have loaned an in-law a significant amount of money. While it is not a lot to some people, it is to us.

We have given this person well over a year to pay us back. It was decided that if the loan was not paid back within a year, there would be interest charged.

If the loan date extended later (like a year beyond that), the interest would be increased.

I decided about three months ago to email them. I got no response. Since then I have emailed two more times. I finally received a response.

This person is an independent businessperson who is always chasing the first million.

They said that basically the sky is falling. You know — “My car died,” “I had to relocate some of my inventory” — one hard luck story after another. While I am sympathetic to their situation, it is not my problem.

My wife is stressing out about this, as she is a very caring woman, much more than I. But I have explained to her that we made the loan together as a family.

I am not sure how to respond to their email, other than to say, “I’m sorry about your current situation, but when can you pay us back?”

I have already explained in detail to the in-law that we moved and we also had car troubles and issues with our new house and that we needed the money.

What should we do? — Owed

DEAR OWED >> Unfortunately, I think you should prepare yourself for the fact that you are unlikely to be repaid. You seem to have discussed financing terms with your in-law, but the terms are vague, and you don’t mention having any signed agreement on paper.

Also, asking “When can you pay us back?” invites the answer, “Never.” You should convey, “We expect you to begin repaying this loan on [specify a date]. Your monthly payment should be [specify an amount]. If you don’t make payments, we have no other choice but to contact a lawyer.”

Please — this is an expensive lesson, but in the future — never loan money that you cannot afford to lose.