Five years ago I lent my sister 20,000 and she said the bank needs it down as a gift and now she won't pay it back. Is there anything I can do?
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4Oh dear. I hope those were Won or something like that. Which country are you (and your sister) in? – hmakholm left over Monica Oct 05 '18 at 00:40
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4Verbal contracts are notoriously difficult to enforce. Do you have any paperwork / email / interest charged etc to say that the money was a loan, not a gift? – Lawrence Oct 05 '18 at 00:47
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1Maybe this is related to this question: https://interpersonal.stackexchange.com/q/2699 – user2652379 Oct 05 '18 at 01:32
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7Rule #2 of personal finance, never lend money to friends or relatives. You will probably never get it back, and it will ruin your relationship. I would suggest talking to a lawyer who is familiar with your local laws. – pojo-guy Oct 05 '18 at 03:52
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Did you actually agree to this request and, if so, how? Is there any written record and if so, what does it say? – Glen Pierce Oct 05 '18 at 10:16
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Here is one thing you can do: learn from your mistakes. – Pete B. Oct 05 '18 at 10:40
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2Possible duplicate of How to get back the money that you lent someone? – yoozer8 Oct 05 '18 at 12:44
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2If you do have written evidence of this arrangement, see a lawyer before doing anything with it. Its existence may be evidence of bank fraud, by both of you. – ceejayoz Oct 05 '18 at 13:34
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You never, ever get back money from siblings. Just forget about it. – Fattie Oct 05 '18 at 16:00
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@pojo-guy what's rule #1? – Kevin Oct 05 '18 at 17:43
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@kevin Rule #1 is never borrow money. – pojo-guy Oct 05 '18 at 18:53
1 Answers
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I am neither a lawyer not a financial advisor. This is neither legal nor financial advice.
If "she said the bank needs it down as a gift" is because the loan was used by her to help buy a house (together with a mortgage from the bank), then – from what I've seen here on PF&M – this could complicate things. When banks determine whether to lend, how much to lend, and at what rates, part of those calculations – as I understand it – are influenced by where the borrower's down-payment is coming from (savings, gift from others, a loan etc.).
If you can "prove" it was a loan, but she said it was a gift, the bank may have grounds for action of some kind against her, and possibly you, for misrepresenting the facts when she applied for a mortgage.
If you cannot prove it was a loan (and she can point to her mortgage documents to indicate it was given as a gift), you will probably have a hard time enforcing repayment.
In practical terms, you probably have to consider the money gone. If it happens, later, that sister is both willing and able to repay (some of) the money, then I think that must be seen as a bonus.
To do anything else, you will need to seek appropriate legal advice.
TripeHound
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Specifically, the bank wants to know how much you owe besides the mortgage, so they need to know if that $20K was a gift or a loan. I don't see any reason why the OP would get into trouble if OP had no agreement with the bank. – David Thornley Oct 05 '18 at 17:54
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1Bank would have asked for a letter signed by the OP that the money is a gift. OP's sister could not have signed the letter on her own. Thus if OP pushes for repayment, the bank now has documented proof of fraud committed by the OP. – void_ptr Oct 05 '18 at 18:54