Get Premium
Dark mode theme is available exclusively for premium users. Learn more about the benefits of subscribing.
No fees, cancel anytime.
Dark Mode 
No fees, cancel anytime 
then open in external browser
and click "Open in External Browser" 
“More money, more problems,” rapped The Notorious B.I.G. once upon a time. And it seems not much has changed since then. Money can cause some serious issues, especially between friends and family. Whether it’s arguments over an inheritance or relatives not paying back loans, there’s no shortage of stories about financial family feuds.
One man had a fall-out with his cousin over inheritance and they’re no longer speaking. So imagine his surprise when he was inundated with calls from family members years later, nagging him to “donate” his hard-earned savings to that same cousin. The cousin had gone against advice and bought a “ludicrously expensive house” that he couldn’t afford. Now, relatives want the man to help him pay his debt, but he’s not sure if he should.
RELATED:
The man says he warned his cousin not to buy the expensive house a few years ago, and told him he’d regret it if he did
Image credits: Jakub Zerdzicki / pexels (not the actual photo)
But the cousin’s wife wanted the house, so he went ahead and committed to a mortgage that he couldn’t really afford
Image credits: Nicola Barts / pexels (not the actual photo)
Image credits: iWantFUmoney
Experts say helping someone else out should never leave you in a tight spot
Image credits: Karolina Kaboompics / pexels (not the actual photo)
Finance and Investment site Investopedia advises that lending money to friends and family requires careful planning. “Lending money to family and friends can be a gesture of goodwill when someone you know is in a tight spot financially, but it can be problematic if your efforts to help lead to disagreements or you experience financial issues as a result,” reads their website.
A 2019 Lending Tree survey, found that almost a third of those polled had a bad experience after lending money to friends or family. More than a third hadn’t been paid back. While just under a quarter regretted their decision to help. Monthly housing costs and vehicle expenses were the top reasons people borrowed money.
Investopedia says it’s important to consider how lending money to a relative could impact your own financial situation. “For instance, if lending money to someone would put a strain on your own finances and make it difficult to keep up with your bill payments, it’s probably not the best move,” warned Investopedia. “On the other hand, if you have a sizable emergency fund, little or no debt, and you’re getting a steady paycheck, making a loan might not be as difficult to manage.” In the case of the OP, he can’t afford to buy a house of his own, and had been saving for a car.
The OP used the word “donate”, which implies his family expects him to gift the money to his cousin, with no expectation of getting it back
Image credits: Andrea Piacquadio / pexels (not the actual photo)
If he goes ahead and donates his savings, he might end up paying more than he initially expected. Experts warn there can be tax implications when it comes to gifting money to someone. According to Edelman Financial Engines, “gifts of more than $18,000 per person per year could make you (not the person receiving the gift) subject to the federal gift tax”. There are no tax implications with loans because you’re (supposed to) get the money back.
But it’s crucial to have a contract in place. “The IRS considers money you lend to a family member to be a loan only if you sign a loan agreement, charge interest and try to collect (to the point of hiring a debt collector or taking the borrower to court),” cautioned the company. “If you fail to meet all three requirements, the IRS can say your loan was actually a gift that’s subject to the gift tax.”
The cousin was already struggling with payments before Covid but the fallout from the pandemic made things worse
Image credits: zydeaosika / pexels (not the actual photo)
He’s one of millions who fell behind on mortgage payments because of Covid. A 2021 report by the Consumer Financial Protection Bureau stated that “since the beginning of the COVID-19 pandemic, the number of borrowers who are behind on their mortgage has increased to a level not seen since the height of the Great Recession in 2010.”
Many people entered what’s known as forbearance. It’s when a bank lets you temporarily stop paying your loans. The report found that ”a year into the pandemic, a significant share of mortgage borrowers remained in forbearance programs or had delinquent loans.” It further stated that those who were already struggling before the pandemic were likely to battle to get back on their feet and could risk losing their homes.
People were curious to know whether the cousin had bought an overpriced house or an average priced one in an area he couldn’t afford
“Donate one dollar”: Netizens weighed in on the issue, with most agreeing the man should hold onto his savings and not feel guilty
Poll Question
Total votes ·
Thanks! Check out the results:
Total votes ·
Newsletter
Subscribe to Access
Exclusive Polls
By entering your email and clicking Subscribe, you're agreeing to let us send you customized marketing messages about us and our advertising partners. You are also agreeing to our Privacy Policy.
Thank you! You've successfully subscribed to newsletters!
Explore more of these tags
What do you think ?
TribbleThinking 1 year ago
Tell them you'll do it in return for a 30% equity stake in their home, sale to be forced in 5 years if money and interest not paid up by then, written contract compulsory. Your money, your choice of return. They can't complain, they're so very certain your money's safe, so...
cherry~ 1 year ago
Some interesting tidbits about real estate in China (I learned this from family): You don't actually pay for a house you see (most of the time). Instead, they build one house on a skeleton where other houses will be and then furnish that house really nice. They then show you what your house *could* look like in a tour, and you buy the house that you haven't even seen yet.... And if you lose that house that you haven't seen yet cuz they ran out of money, good luck trying to get your money back. It's not going to happen without a legal battle you will probably lose. Now OP's cousin is probably getting something different here because it sounds like he did have a box that he could actually live in. I will never understand how people let their reputation get in the way of everything else though. Knowing real estate in China, it's so much better just to get it in America, so why make stupid decisions so your "friends" respect you a bit more?
Craig Reynolds 1 year ago
Did anyone bother to tell him that you can't actually own a home in China? The government owns all land. It's just a lease, a lease that begins when the land is leased to a developer. It's a 70-year lease and the clock starts the moment the developer buys the lease. If it takes 5 years to complete the building and start selling, the buyer gets the remainder of the lease time on their unit. If the buyer later resells it, the lease does not reset. The buyer gets the balance of the lease. When the 70 years are up, the land and everything on it reverts back to the government. This started with Deng Xiaoping in the 1980s. As such, no 70-year lease has expired yet, so, no one knows what to expect when that starts happening. I imagine the government would want to tear down those aging buildings and replace them.
Eroe Infinito 1 year ago
Sometimes you have to learn the hard way. I personally always believed that everyone was a good person and tested that theory by loaning someone 10K. I was wrong. But I have since learned that not everyone is as honest as they act and that's saved me in the long run lol
StumblingThroughLife 1 year ago (edited)
NTA. Don't fold. Live your (OP's) best life without barnacles clinging onto you. I've been burned - but for less money than that, thankfully, but enough for it to financially hurt, by a sister (we ended up estranged, for this + another thing she did).
Schmebulock 1 year ago
Does BP just repost the same story every month or so? I think this is the third or fourth time I have seen this one and it's not even very good. The OP should simply tell his cousin to move back to the US and walk away from the house. He won't be able to go back to China, but who cares?
Steve Hall 1 year ago
You are only responsible for your own mistakes. Block the family and buy yourself a new car.
TribbleThinking 1 year ago
Tell them you'll do it in return for a 30% equity stake in their home, sale to be forced in 5 years if money and interest not paid up by then, written contract compulsory. Your money, your choice of return. They can't complain, they're so very certain your money's safe, so...
cherry~ 1 year ago
Some interesting tidbits about real estate in China (I learned this from family): You don't actually pay for a house you see (most of the time). Instead, they build one house on a skeleton where other houses will be and then furnish that house really nice. They then show you what your house *could* look like in a tour, and you buy the house that you haven't even seen yet.... And if you lose that house that you haven't seen yet cuz they ran out of money, good luck trying to get your money back. It's not going to happen without a legal battle you will probably lose. Now OP's cousin is probably getting something different here because it sounds like he did have a box that he could actually live in. I will never understand how people let their reputation get in the way of everything else though. Knowing real estate in China, it's so much better just to get it in America, so why make stupid decisions so your "friends" respect you a bit more?
Craig Reynolds 1 year ago
Did anyone bother to tell him that you can't actually own a home in China? The government owns all land. It's just a lease, a lease that begins when the land is leased to a developer. It's a 70-year lease and the clock starts the moment the developer buys the lease. If it takes 5 years to complete the building and start selling, the buyer gets the remainder of the lease time on their unit. If the buyer later resells it, the lease does not reset. The buyer gets the balance of the lease. When the 70 years are up, the land and everything on it reverts back to the government. This started with Deng Xiaoping in the 1980s. As such, no 70-year lease has expired yet, so, no one knows what to expect when that starts happening. I imagine the government would want to tear down those aging buildings and replace them.
Eroe Infinito 1 year ago
Sometimes you have to learn the hard way. I personally always believed that everyone was a good person and tested that theory by loaning someone 10K. I was wrong. But I have since learned that not everyone is as honest as they act and that's saved me in the long run lol
StumblingThroughLife 1 year ago (edited)
NTA. Don't fold. Live your (OP's) best life without barnacles clinging onto you. I've been burned - but for less money than that, thankfully, but enough for it to financially hurt, by a sister (we ended up estranged, for this + another thing she did).
Schmebulock 1 year ago
Does BP just repost the same story every month or so? I think this is the third or fourth time I have seen this one and it's not even very good. The OP should simply tell his cousin to move back to the US and walk away from the house. He won't be able to go back to China, but who cares?
Steve Hall 1 year ago
You are only responsible for your own mistakes. Block the family and buy yourself a new car.
You May Like Woman Accused Of Destroying The Family By Accepting The Inheritance She’s Been Unaware Of Until Now A Teen Boy Faces Karma For Using Mom’s Sibling’s Credit Card To Buy Game Stuff Without Their Consent In-Laws Make Bride Sign Prenup To ‘Protect Son,’ Life Plays Uno Reverse As She's The Rich One
Rugilė Žemaitytė
Monika Pašukonytė
Rūta Zumbrickaitė
Related on Bored Panda
37
24