Bank of mum and dad

It's a lot of money Wanderers1 even if they have set up a DD. Have they explored all the possibilities for dealing with their debts? There are ways of getting some of it written off. DS has had a lot of problems with money and eventually got help through the CAB. Even so we are still contributing to his rent every month - not quite to the tune of £10k though.

Deedaa thank you for replying, this total is with a discount for early payment and this is only part of their debts.
They realise they have been daft where money is concerned (not a word I'd use). Not defending them but credit is so easy to get.
Tonight we have gone through a plan with their income and out goings, shown where they can save.
We are confident they will be able to pay the other debts off and us.

You do not expect to be doing this with adult children - what a shame that these young people have got themselves into such a fix. It sounds as though not only are you lending them money but also acting as financial advisors!!

Wanderers1 - good for you. I suppose I would do the same but I would feel somewhat resentful that they'd been silly enough to get into so much debt. Sounds like you gave them some much needed advice along with the dosh.

It’s good that you’ve gone through a plan with them and that you think the situation now for them is manageable. I hope it does work out well for all your sakes and that they felt able to come to you for help.

Thank you everyone, we are a close family and everything we do is for them what ever age. As long as we have enough to keep enjoying ourselves
will try our best to help. Which we do.
We both had a very hard up bringing and we decided when we first got married that if we had a family we all stick together. If we have been lucky to get or win (hubby plays a sport where you can win money which he's been at the top not a famous sport) they always get a small share.

Your post made me growl as it's just happened to me . I had to help out my daughter , she's set up a direct debit to repay me but I 've told her to cancel it as if she can't manage now , how is she going to manage to repay it , I think if there's no money in her bank she'll get extra charges .
I gave my second daughter the same amount to balance them up , which I felt was fair .
I've never been in debt in my life , had no parental input from my parents and i am content . I struggle to understand the modern world !
I don't think you'll get your money back - maybe just write it off meaning less inheritance for them ? Not fair on you at all .

tiredoldwoman, I think you are being unfair. the OP and her children have taken the whole issue very seriously and the repayment has been set up based on what they can afford.

We get so many stories on GN of parents who have given their children everything, paid debts, bought cars, etc, etc and post in distress because their children are demanding more money and threatening to stop them seeing grandchildren if they do not help.

Here we see wise parents and a good family dynamic. Both of my DC got into financial muddles in their university/early working years, they always came to us and we helped them sort their problems and we lent them money that they repaid on a regular basis and did not let us down. They are now in their mid 40s and are sensible and careful with money. I see no reason to think this will not happen in Wanderers1's case.

Wanderers1 is not alone in the situation she has found herself in, nor in her solution. If she knew, she would probably be surprised by how many of her friends and relatives are doing just the same thing as she is.

It makes sense as I presume they will not pay you interest. Their debts are cleared, they only have to pay you and hopefully they will do so and start afresh after the 38 months.

I'd feel fortunate to be able to help out in this way. It's better they come to parents than loan sharks and the fact they did so makes me hopeful they'll learn from this experience. The bank of mum and dad is alive and well everywhere that mum and dad have any savings.

Your children must be very relieved you are helping them
Wanders we don't like to see our children in difficulties.. I think you should make it clear that this is a one off and they must learn from this experience. Good luck.

I'm sure everyone is correct in saying other mum and dad's are helping their children. Yes it's best to come to us than go loan sharks, payday loans etc.
No they won't pay interest. We are happy to help them as I said it's all about the family.
I think this has scared them and they hopefully not get in debt again.

I think you have done the right thing Wamderer. Much better to borrow from you than elsewhere. It also says a lot about their relationship with you that they could ask for a loan and arrange to steadily repay it. This is what family are for.

We have just given large sums to our son and daughter. They can now pay off their mortgages. In our son's case he will be £700 a month better off. Our reasoning was that there is no point in them getting this money when we die. We hope not to die for another 20 - 30 years! This way we get to see the grandchildren benefit from the money. We don't need to be paid back as we have enough for ourselves, but if we did, we'd be happy to accept a monthly payment. Family is everything.

Bankruptcy or a Debt Relief Order or some other strategy may well be a better idea, especially if "this total is with a discount for early payment and this is only part of their debts". Having worked with people who get into debt, I know it is often a pattern that continues or repeats itself over time, due to misfortune, poor budgeting skills or just plain stupidity. So maybe they should have talked to the CAB or National Debt Line to explore alternatives first to see if they could get some of it written off somehow or achieve a sustainable repayment plan on their own and to avoid the risk of you possibly throwing good money after bad?

After quite a few occasions of helping my adult son with his overspending, and attempting to instill some financial planning into him, he continued to get himself in a mess. This was not as a result of any misfortune, just overspending on a large scale. On the last occasion, some 3 years ago, I’m afraid I said no, you will have to sort it out yourself. He did get some debt advice and after 3 rather fraught years, he is now debt free, and managing his money better. He still lives from one payday to the next, but at least he isn’t in debt. I think he needed to learn that you can’t just have everything you want, the minute you want it. I felt awful saying no, and he did have a rather dreary time, with not much of a social life, but it was worth it.

I hope that your generosity is rewarded and they get their lives back on track.

Wanderers, I think what you're doing is super if you can afford it. Yes your children have been foolish with money but they're far from being on their own and if you can help good on you. I've helped my DD & DIL and don't want the money back, I'd far sooner they have anything now that can help them rather than when I'm gone , I've suggested the money they'd be paying me back goes into savings so if I do need it in the future then I'll get it, but if not then they'll have a nice little nest egg later. Win win as far as I'm concerned .

Is there some way you can secure this loan by way of second charge on their property, just in case they default, because a secured loan would be repaid aead of other creditors and they do seem to have been lax in their spending.

I have been let down more than once when lending money tot he children only to find drastic changes in their circumstances leave me out of pocket.

We all do it because we love them but things can change for them.

We are off to spend lots of money on refurbishing our daughters house. Looking at kitchens this morning.
We own the house, she and her husband pay rent at a much reduced rate. They only have one child, can’t afford another.
They both work hard but are only on min. wage so not a lot of cash. So we re helping them.
Hats off to you wanderer1, don’t suppose you had much choice but you all seem to have handled it in a sensible way. As long as they have realised things have to be paid for in the end they should be fine.

Yes, I think we all help out at times,my Son is a single parent and has two teenage boys, he copes well but occasionally he has difficulty with bills, when there has been a pay out for the boys winter clothes, shoes etc. I have said "ask when you need to" which he does, it is never a huge amount and I must admit he always pays back as soon as he can which is usually the month after he has borrowed, it is odd really but I do get satisfaction when I can help him, it is nice to be able to do so, and I KNOW I always get it back, sometimes with interest! Sometimes I say when its time to pay back that he doesnt need to, but not every time obviously.

Oh dear a loan advert has popped up!

I have been the bank of Mum for years. My son lives on another planet and I always have to bail him out! The cost so far has been £30,000 (my premium bonds!!). I dread new Years Eve, as it is always the month of January when he has the problem. He is not conning me, he is just really stupid with money!! no matter how many times I have shown him how to budget! But I love him so dearly, and shrouds don't have pockets!

My sister and I have both had to go to the bank of Mum over the years (I wouldn't want to owe Dad) but now that she is older she is refusing to accept money from me which makes me cross but there is no point in getting cross with her now that she is in her 90s. If you can afford it without it affecting your ability to cope as you can get older, as they seem chastened by what has happened, I looks like it should be ok - but hopefully they will be able to return the favour at some stage and you will accept it. (Sorry, that's slightly off at a tangent but a bit of a raw nerve.)

I agree with inishowen, "family is everything".
Wanderers1, I know that it's upsetting when you find out that your Ds and Dil have not handled their money well.
At least they admit this, by telling you they've been "daft" .
They seem to be very open with you as you have all gone through a plan, with their income and outgoings together and they can pay you back and their other debts as well.
You said that the debt had scared them, it sounds as if they could have lost their home maybe. So hopefully now you and Dad have got them on the right path all will be fine.