My parents owe me money

Dear Cary,

I am struggling with whether to ask my parents to repay a loan I made to them several years ago.

I am a 40-year-old professional, living on a coast while my parents still live in the Midwest city where I grew up. I make a good living, although I have many obligations (kids approaching college age, a house that we are not living in on the market over a year, etc.). Several years ago, my parents were in a financial crisis. My mother, a professional who had been the breadwinner of the family for some time, was having some health issues and her income was down. They ran up a great deal of credit card debt and were on the point of declaring bankruptcy. They asked me for a loan.

I was quite conflicted at the time about whether to give them money. I love my parents a great deal, and they provided for me very well, sending me to college and setting me up to move forward independently in life. (I put myself through professional school and am still paying off loans from it.) My parents have never been good with money. For most of their adult lives both have had very good incomes, but they have spent their money, and more, as soon as they got it. They had very little savings (less than $10,000). My father, for a variety of reasons of his choosing, had not worked full-time for several years. When they asked for money, I really wanted to help them, but I wasn't at all sure what would be the best thing to do. I was concerned that if I loaned them money, it would simply delay the inevitable for a little while.

Finally, after they explained their plan to refinance their house, restructure their debt and change their spending habits, I decided that I would lend them the money. The amount was large, but not unduly painful for me to part with. My dad said to me at the time, "You will see this money back." I replied, "Thank you. I do want it back someday, but I am doing this to help you, and I don't want you to be stressed more about when you pay me back. Get through your situation." They did, and to their credit, were able to right the ship to a degree and make it through.

A couple of years after that, my wife (now ex) of 10 years and I were separating and I was financially stretched. She had moved out and the kids and I were living in our house with about half the furniture we needed and a 15-year-old TV. I was dipping into retirement savings to pay the mortgage, etc. At that time, I took the kids on a long-planned trip to visit my parents. When I got to their house, I discovered that they had, thanks to the housing bubble, refinanced their house again and were in the process of entirely redoing their kitchen and family room. Their brand-new gourmet appliances, flat-screen TV and an entire family room of expensive, stylish furniture were in their garage while the work was being done.

No mention was made of the money I had lent them. I probably should have said something at the time, but I was, frankly, stunned. I also did not want to ruin the visit for my kids.

Several more years have passed now. During that time, my parents inherited several hundred thousand dollars from a family member. They are retired and living comfortably, although both of them have chronic health issues. Fortunately for me, I have done well in the interim, and am in no dire need of the money that I lent them. Nevertheless, the issue eats at me. I was very hurt that my parents, after I had helped them, did not step up when their fortunes had risen and it would have really helped me. Now, the money doesn't really matter, but I live with this feeling of hurt and resentment.

Am I being petty and ungrateful to the people who raised me? Or should I confront them about my feelings?

Conflicted Son

Dear Conflicted Son,

I know how it is. These issues can hang over you but you think, well, I don't really need it.

But the issue hangs over you.

I wouldn't confront them about your feelings. I would confront them about the money.

And it's not about whether you need the money. It's about honoring the agreement. It sounds like it was one of those agreements that are open-ended. That's a shame. Agreements need dates in them when things are supposed to happen.

But with family, well, I know how it is.

Here is one way you might approach it. Consult a financial planner and look at the tax implications for both you and for your parents, and talk about investment strategies, and broach the subject from that angle. If there are, for instance, advantages to receiving the money in increments over a few years rather than as a lump sum, you might propose that as the reason for broaching it now. Or if now is a good time to invest it in something, propose that as the reason. You might say that as long as it's going to be paid off, the proper way is to pay it off in smaller amounts, for tax purposes. You could say that you want to avoid a situation in which your parents pay it back all at once, or a situation in which you might need it and they might not have it.

Your parents probably have feelings about this money as well. They may feel a bit ashamed at having to ask their son for money. They probably want to pay it back but are having trouble mustering the willingness to do so. In fact, that is one sign of people who do not handle money well. They do not willingly pay their obligations. Sometimes this is because they do not feel secure that more money will come. They live in fear about money. They binge and purge. They gloat and then they starve.

It's possible that your parents are actually quite dysfunctional about money, and so this will also be an opportunity for you to go over their situation and plan for the future. As their health problems and age increase, they may start to do dumb things with money. Perhaps you can start now to become involved with their finances, you can monitor things and avert catastrophe.

The matter of your feelings of hurt, that's a separate thing. It was a hard time, I'm sure. You were getting divorced and probably felt somewhat alone and vulnerable. It's likely that you did not know how to talk to your parents at the time and tell them how you were feeling. Perhaps they had feelings about it, too. But you stayed away from emotional topics. You left much unsaid, not just about money but about the divorce.

There are ways you can heal the relationship with your parents, and taking care of this outstanding loan is a good beginning. Maybe after you work this out, you can start talking to your parents about your life in a way that is a little bit more open than you have in the past.

Asking for money is hard. But it's your job. It's what money requires.

Money requires that people ask for it. If nobody asks for the money, then the money doesn't move. It just sits there. Money doesn't want to just sit there. It wants to move around. It wants to be shown that it's needed, that it's important. So don't ignore the money. You can't anyway. You're thinking about it. Of course you are. Because it's money. Money is great. It deserves to be thought about.

So asking for it is part of the process of getting paid back. It's necessary. You might consider it a service to the debt, or a duty to the debt. That is, it's not about you wanting the money back. It's about completing the transaction.

What will you do if your mother or father says, Well, we didn't think you really wanted us to repay you, or, We think you're doing well enough and don't see that you need the money.

It would be good to have something in mind if they say this. You might say, well, let me talk to my accountant again ... which would buy you time.

It isn't about whether you need the money. It's an agreement that was made. It's about honoring the agreement.

One thing is certain. The debt is not going to go away. It's not going to pay itself back.

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