He Loaned His Parents $250,000, But His Parents Wound Up Filing For Bankruptcy, And Now The Money’s Gone
Have you ever loaned a relative or close friend money, thinking it would help them get back on their feet, but things didn’t work out?
One man decided to loan his parents the large sum he and his wife put away after selling their house a few years ago to help them save their family business. However, his parents still filed for bankruptcy, and now his wife is angry at him.
He’s 35, and his wife is 32. They have kids together and used to live in a house but decided to sell it a few years ago so they could move to another city and rent an apartment.
“We ended up with close to $250k from the sale proceeds sitting in a bank and not doing much,” he explained.
“The intention was to use it as a deposit for a new house one day, for the kids’ education, or something else [that’s] meaningful. For us, it’s a lot of money. Neither of us is from a rich family, and [we] definitely were not given a kick start to life like some others.”
After selling their house, he and his wife were excited about the possibilities that money could provide for them. However, he ended up using it for something unexpected.
Last year, he found out his father was struggling to maintain his family business, which is a small metal workshop. His dad was looking for a loan to expand the business but couldn’t get one from the bank.
He spoke to his wife and decided to loan his parents the money they had from selling their house. He figured his parents could pay him back within a year or at least when he and his wife really needed it.
His dad agreed to take the money, and they made a plan. Everything seemed promising, especially because his dad offered to pay him interest. However, they never officially drew up a contract or made any official documentation related to the loan. Half a year later, he received some bad news.
LIGHTFIELD STUDIOS – stock.adobe.com – illustrative purposes only, not the actual person
“My mom called me in tears [as] they had to file for bankruptcy because they had no more money,” he said.
“Their business was going south for a while apparently; they’re owing money left, right, and center and even had to re-mortgage their house. All that only prolonged the inevitable. My heart stopped and sank. I feel their pain, but I also knew that I’d never see our money ever again.”
Looking back on the situation, he realized there were some red flags he ignored when he loaned his parents the money, and he failed to get a real sense of what was going on with their business because they didn’t like to talk about money much.
“My wife is now mad at me, and I can understand it,” he added.
“I feel terrible. I robbed my family of a brighter future. We could have had a much easier life with so many opportunities, and instead, we’re back to where we were 10+ years ago.”
However, their situation is different now, as they’re on a single-income budget since his wife is on parental leave and they have kids to feed. Now, the loss of their savings has caused a lot of bitterness between him and his wife.
Was he wrong to loan his parents all of his money, or was his decision valid?
You can read the original post on Reddit here.
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