Inheriting money - not sure what to do

LegacyUser · 07-03-2012 9:35pm #1

I am about to inherit a sum of money. Most of it is going aside for my future, but I'm keeping some aside for immediate use. My problem lies with my partner. We're together a few years, but not engaged yet as we feel we're too young. We've discussed marriage extensively, and we're both in this relationship for the long haul. My girlfriend racked up some debts before I met her, but lost her job a few years ago and has struggled to make the repayments. In total now she owes maybe 3K. With the money I have coming in, I could easily pay these off for her, but I'm reluctant to do that. I'm afraid that if I pay them off, she wouldn't learn from her mistakes, basically. About half the debt is an overdraft from when she lost her job and ended up going back to college, which is fine. The other half is the remainder of a loan from years ago that she should never have taken out. I'm afraid that she'll just run up the debt again during the rest of her studies, and I won't be doing her any favours in the long term. I'm basically looking for opinions here - should I just leave her get herself out of the remaining debt, or make her life a bit easier by helping her pay them off?

wylo · 07-03-2012 10:37pm

If it's a genuine fear that she'll run up more debt I wouldnt bail her out, as hard as that may feel, its common sense.

Acoshla · 07-03-2012 10:37pm

I wouldn't pay it, like you said she won't learn from her mistakes. My fiance had a lot of debt, now he only has a bit, about 3k too, I actually offered to pay it when we got engaged so he could start saving for wedding with a clean slate (to pay it off in full with my money would cost slightly less than it'll cost to pay over the next few months), he flat out refused, said it's his debt, I shouldn't have to spend my money on his debt and this is what he gets for racking it up in the first place. I personally wouldn't pay a partner's debt until I was married or engaged to them, if I'd done anything like that for my last boyfriend who I was with for 5 years - living with for 4 years, one of which was abroad so very committed - I'd be damn sorry now.

Chickus · 07-03-2012 10:40pm

Absolutely do not help her out..has she suggested or does she expect you to help? By all means encourage her to pay it off, buy her a gift if you like but don't help her out financially..
...i know a guy who did this a few years back,, was going out with a girl for year who had racked up huge debt and he used to pay off her credit cards...such a fool as she bled him dry, he couldn't say no to her..and didn't end well

theg81der · 07-03-2012 10:56pm

Omg your not her Dad, she made a silly mistake it could be worse how long do you plan on making sure she`s learned her lesson, what would satisfy you! If your together for the longterm - her debts are yours. I wouldn`t stay with someone this mean with their money, mean no matter what way you try to justify it with rubbish about teaching her a lesson.

Acoshla · 07-03-2012 10:59pm

theg81der wrote: »

Omg your not her Dad

Which is exactly why he doesn't have to be responsible for bailing her out.

thefeatheredcat · 07-03-2012 11:08pm

What's the ratio of the debt to the inheritance?

While it's a kind gesture and a generous one too, I wouldn't consider paying off the full cost of either debt if there is a fair risk that she would rack up the debt again.

If it's money you can afford to throw into a black hole or set on fire, then by all means sure. But if you think that you may regret the action later in the sense that you look back and think you sunk money into something that wasn't worth it, or that you could have used that part of the lump sum for something else towards your joint future.

Having a debt paid off is a nice thing, but it can be tempting just to have it cleared and then rack it up again, even if really disciplined. Paying it off herself might help her in the long run in seeing the merit of having the debt and paying it off.

Perhaps come up with an approach with her in helping make the repayments easier if it is to enhance both your joint futures. As in, you can contribute X amount to the repayments either for her to save X amount towards the next repayment, or you can add on top of her amount with an extra to pay off more over a shorter time period.

neuro-praxis · 07-03-2012 11:25pm

I'd pay it. It's rare you'd get the chance to be in a position to be so radically generous, so if I were in your shoes I'd take it.

If it was some fool who'd run up the debt, then no, I wouldn't pay it. But I'm presuming the woman you are planning to marry is not some fool.

Just throwing it out there.

Morag · 08-03-2012 12:01am

Stick some of it in a savings account and say it's for future plans and when she pays back the rest of what she owes you that it will go into that and it's for building your future together.

I know things can be hard esp if she is not working but if your worried about her money management skills then it's something you need to sort out between ye before you make legal commitments.

LegacyUser · 08-03-2012 12:25am

Thanks for the replies so far. Perhaps I should have added that I've offered to give her a loan to cover the rest of her college fees (mature student, no grant). I'm also planning on spoiling her in little ways, like nice meals out, buying her a fantastic birthday gift etc. I want to help her out financially, but I want to do it more subtly that just handing her a wodge of cash to pay off debts. I think I am being generous already. My parents always taught me that paying off my debts by myself was really important, and that has stuck with me. So I'm caught between that line of thought, and thinking 'it's only money, I never had it before, I wouldn't miss that chunk of it, and I'd make her life easier'.

Now I'm thinking - what if I just paid off the loan? It would take a weight off her, help her credit rating, and she still couldn't spend all the money again (like if I paid off the overdraft). But I don't want her to feel indebted to me either :rolleyes:. I have discussed it with her, where she took full responsibility for her debts and said they're hers to pay off, but I know she'd secretly be relieved if the burden was off.

kjl · 08-03-2012 1:37am

OK, I know you think you are going to end up together, but what if you pay off her debt and next thing you know you break up for some unforeseen reason, can you trust that she will pay you back the money she owes you?

Defo buy her a present, but absolutely do NOT pay off her debt

Ken. · 08-03-2012 1:50am

Offer to help her. Match what she pays off.If she pays off €50 match it and make it €100,if she misses a week you miss a week. Shows her some responsibility and makes you look like a really good guy.

wylo · 08-03-2012 2:10am

Heres a suggestion OP if you really want to help her, and not leave her burdened.

She seems responsible and his showing responsibility regarding her debt. People mightnt agree with this because it may seem somewhat cold, but buy out her debt,i.e. pay it off and get her to set up a direct debit with you ,for lets say, half the payment/month or whatever, less pressure on her then, and maybe if you're feeling generous, just stop the payments half way through.

Now that said, I can imagine on a tough month financially for her, it wouldnt be nice receiving a direct debit from her so I can see why that option mightnt suit,
But at least that way the bank wont be getting interest.

wylo · 08-03-2012 2:12am

btw, 3k aint alot of debt compare to where many others are at (im not just talking about mortgages here), Im sure its alot for her given her situation, but just in the long run, its not much

Only reason Im pointing that out is because its not like there is no light at the end of the tunnel for her if she was in the situation where she has to deal with it herself.

Jerry Jordan · 08-03-2012 10:24am

OK if it were my partner i would pay the debt however we are married.
Has your partner got loans recently? do you think she realises how stupid loans are ? is she likely to get more loans. Explain to her you want to help her but ur worried she will get into debt again. Gauge her response. What would make me want to help her is the disgusting amount of interest she is prob paying to the disgusting banks.
perhaps pay it off with the understanding that she is to control her spending much better in future. If you see a future with this girl it makes sense cos if she is in debt now you will not get a mortgage later in life should you want one. Im a generous person so maybe im crazy but yeh i guess i would pay it to take the heat of the person i love.

LittleBook · 08-03-2012 10:25am

moneybags12 wrote: »

We're together a few years, but not engaged yet as we feel we're too young. We've discussed marriage extensively, and we're both in this relationship for the long haul. My girlfriend racked up some debts before I met her, but lost her job a few years ago and has struggled to make the repayments. In total now she owes maybe 3K. With the money I have coming in, I could easily pay these off for her, but I'm reluctant to do that. I'm afraid that if I pay them off, she wouldn't learn from her mistakes, basically.

I'm going to have to go against the consensus here. She got into debt years ago, before you even met her. She then lost her job. Since then she's been struggling to make the repayments (presumably she has been making the repayments) and putting herself through college as a mature student.

She only owes €1.5k from the original loan. Clearly any debt she's run up since she's met you is related to her studies which is understandable. If you weren't coming into this inheritance, presumably she would simply continue to pay off her debts and study.

Don't you think she's "learned from her mistakes" already?

Sorry, but I don't get the impression at all from you that (now) your girlfriend is reckless with money and she seems to me to be working hard to rectify her mistake and improve her education. If it was my partner and I was in a position to easily relieve a "burden" like this, I wouldn't hesitate.

And if you genuinely don't want her to feel indebted towards you, make her a gift of an amount of money (an amount you feel comfortable giving to her, an amount you "wouldn't miss") and leave her to organise her finances her way ... she seems to me to be making a good fist of it over the past few years.

username123 · 08-03-2012 10:44am

moneybags12 wrote: »

I'm afraid that if I pay them off, she wouldn't learn from her mistakes, basically. About half the debt is an overdraft from when she lost her job and ended up going back to college, which is fine. The other half is the remainder of a loan from years ago that she should never have taken out.

Its interesting that this is the girl you want to be with in the long term and make a future with yet you feel the need to be so judgemental of her financial behaviour and somehow in charge of having her 'learn from her mistakes'.

I dont know how old you both are, but I can tell you, 3k is nothing of a debt, particularly as half of that is to do with studies. And the other half, bit cheeky of you to deem she never should have taken it out? Are you her financial controller?

The above said, its her debt, she is responsible for it, its probably better that she deals with it herself - given the way you talk about it and her above I think you could pay it off and then spend the future reminding her of how you got her out of trouble. Whats the point if you cant make a generous gesture without all this judging and deciding what she needs to learn?

gud4u · 08-03-2012 11:52am

Maybe it's different if you're married but I have cleared more than 3k for my husband at times, as I simply had the money at the time. Yes, I have my rainy day/womans stuff account but if you are going to commit a lifetime to this girl then you'll be pledging, similar to what we did, in sickness anad health, in debt and in wealth. It's tough times, she didn't just leave her job and sit at home running up internet and phone bills, ot maybe she did, but then that's another problem entirely.

I sometimes float my husbands business, not by much, but what I can. He helped me out of 10k years ago.

Just have a think about what your future with this girl is, her debt doesn't seem deliberate, if she had a great job now, you get married, she loses it and racks up an overdraft going back to college, are you going to file for divorce. You're not even married yet, are you too young, if so, I can really understand your reluctance.

Don't let money ruin a good relationship, money comes and goes, enjoy it while you have it, sometimes the things you hold onto too tight slip, squashing out the more important things in life without you noticing.

calculator · 08-03-2012 12:04pm

You could offer to pay back her debt and have her repay you over time? That way she wouldn't incur further interest and might find the situation less stressful. Assuming she could be trusted to repay you of course...

St_Crispin · 08-03-2012 12:05pm

Can't you just help her out in other ways? paying off the loan is a big step and it might even be something that would offend her. Maybe just take the weight of her financially in other ways. pay some bills (if you live together) pick up the tab a bit more often when you're drinking etc...

And people, it's just a loan. And a relativity small one at that. It's not like a heroin addiction. Everyone gets loans from time to time. They are not mistakes unless you happen to blow all the money on hookers and coke.

gud4u · 08-03-2012 12:08pm

calculator wrote: »

You could offer to pay back her debt and have her repay you over time? That way she wouldn't incur further interest and might find the situation less stressful. Assuming she could be trusted to repay you of course...

Is that what you're worried about OP, if you are a committed couple, you need to be able to help each other out.

I forgot to mention, I have been out of work since last October and have relied solely on my husband since then, plus a small government payment. I am returning to work soon, I won't pay him back as such, but when money allows, I'ii but him something nice, or give him a lump sum for the busniess. But it won't be paid back personally to him.

iguana · 08-03-2012 2:48pm

I'd pay it off with the chief reason being that it s utterly stupid for her to be paying a big chunk of interest month after month. You've said she doesn't want you to pay it off but why not offer to clear it for her and she can pay you back the lump amount without interest. That would be lifting a big burden off her, without you having to push your relationship somewhere that you don't seem to be yet.

Thoie · 08-03-2012 11:52pm

I like the idea of you clearing the loan, but having her set up a direct debit to repay you on the same terms as she's paying the bank (but without the additional interest).

You could always put the money she pays you aside as "savings" and surprise her with it (or something nice from it) at the end. Or you could put it towards a potential honeymoon if that was on the cards.

pickarooney · 09-03-2012 4:51pm

I don't think you can justifiably make any case about teaching someone to be responsible with money when you yourself have just been given a load of cash for free. If you'd earned it through astute financial management, maybe...

On the other hand, unless she's asked you for the cash, just put it aside for now. It sounds like she's taking the right approach to paying off her debts and is not currently racking up stupid amounts in loans so there's every reason to believe she'll pay it off herself in good time. If there's high interest on it though, perhaps you could think about refinancing the loan. After all, the more she has to give to the bank the less she has to spend on buying you nice things

cynder · 09-03-2012 5:30pm

6 years ago my self and my partner bought our house, the debt mounted up, it was just about affordable for us to repay it. However my husband got cancer and we had illness protection, he got a lump sum for that and he cleared my c/c 6k. he cleared his car loan 17k, he cleared his credit union loan 10k and with the rest we planned a small wedding and a 10k trip to Disney world Florida after all we deserved it.

The relief to get rid of the debt was fantastic, with debt hanging over your head it can become depressing.

I would pay off the debt. it not like she is going to do a runner if you do, your committed to each other why not relive her of the burden.

The Corinthian · 09-03-2012 6:12pm

I think the OP's primary concern is how this will affect his other half's attitudes and financial dynamic of the relationship.

Some people will see this as a sign that they have someone who'll bail them out in the future, no matter what stupid mistakes they make. This combined with a lack of reciprocation can also lead to resentment and ultimately a breakdown in the relationship.

Others will, if they incurred this debt on their own and have a scrap of self-respect and responsibility then they'll reject such an offer. Instead, pay a bit more or help her financially elsewhere while her disposable income is reduced in the duration of this debt's repayment and this may be a better alternative.

So honestly, I'd look at an alternative means of helping her out other than paying the debt directly.

saa · 09-03-2012 6:51pm

It depends how much money you have, I am interpreting this the same way as LittleBook, its not like the loan is reckless and she would pay it back if she was working, you could pay it off so she only has to repay you the money without interest.
But then instead of a boyfriend you become a bit of a bailiff.

If she can manage let her sort it out, if she is going under you may need to bail her out if you're not saving her from anything majour dont make things complicated.
This is a once off amount you have which you will need

LegacyUser · 09-03-2012 7:48pm

Wow, there's a lot of judgement here. I thought the fact that I was even considering paying it off was a good thing, but apparently some people think I'm a tight-fisted git because I stopped to think about the consequences.

The Corinthian has it spot on. My girlfriend is not very good with money. If someone handed her €500 tomorrow, she'd spend it on luxury items immediately, rather than putting it towards her debt. If she is very low on money, the first thing she does is stop making repayments. I don't blame her because she's putting herself through college in an appalling recession where government funding has disappeared, fees have risen, and she can't get a part-time job for love nor money. However, I don't want her to start thinking that I will bail her out, no matter what. I'm already very generous - I pay for at least 90% of social costs that we incur. She lives at home out of necessity so I can't pay rent or bills for her because there are none. If I suggest going for drinks or eating out, I'll pay. If she can, she tries to go halves, but then I just end up giving her back the money in other ways. I trust that when she's earning money, she'll start paying her way. But the upshot is, in the time I've known her, she's never been good with money. I'm not just an arse who judges her for taking out a big loan in the past.

This thread has been very helpful though. I think I'll discuss it with her when the money comes through, and I really like the suggestion of paying it off now, but making it that she owes me rather than the bank. I'll set up an account where she can make repayments to, and then we can ultimately use that money for our future - be it on holidays, or our wedding, or whatever. And if things go sour and we break up and she does a runner, the money lost won't have that much of an impact on me financially. Thanks for the input, everyone.

Fentdog84 · 10-03-2012 1:50am

Its really up to yourself op and how comfortable you are with the situation. I mean is she bad with money in general? Maybe you could offer to pay off a certain amount and give the rest in the form of a loan. As for your inheritance, Id be careful about telling people about it, friends and even your partner. You'd be amazed the way some people aren't shy when asking for money! If I were you Id keep a certain amount somewhere that only you know about. good look.

niceoneted · 10-03-2012 1:59am

OP I'm sorry to say this but you say she cannot get a part time job for love nor money. Ok I'm not sure where you are located but if it is Dublin or the greater Dublin area I disagree. I have a niece who who is college the last 3 yrs in Dublin who has hardly been a day out of work. The last job she lost after xmas we as a family were glad of - as she is in final yr and we didn't want her under pressure. Next thing within days she had another part time job lined up. All her jobs are in retail. I have seen a good few advertised myself in shop windows.
There is also the likes of babysitting which another niece does alot of and makes a nice return.
anyway with regard to the debt, I would consider paying it on the basis that she repay it by setting up a DD to your account.
Has she any income at all??

Shelga · 10-03-2012 1:07pm

OP, I'm not sure if it's been mentioned, but does she actually WANT you to pay off her debt? Have you discussed it at length? Does she ask you repeatedly to pay it for her and get in a huff when you put off the issue?

I think the question hinges on whether she WANTS you to help her or not. If she EXPECTS you to, that's unacceptable. If she doesn't want your help, then there is no issue, is there?

I was in a LTR with a guy who was much better with money than me. I would still never have accepted his help in paying a debt, except as a loan on a very short-term basis.

Inheriting money - not sure what to do

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