My reason for urgently needing a HELOC

[easysurfer]

Fuego,

Not to condone the irresponsible behavior of your gambling SIL, but as you probably already know, gambling is a pervasive problem in the Asian culture. A link here to add some perspective: Gambling, Addiction, and Asian Culture : Asian-Nation :: Asian American History, Demographics, & Issues

I know for many it is difficult to understand, how can someone just go ahead be so irrational and gamble away money that could have been saved for the children. Not to make too many stereotypes, I hope, but I suppose this is the vice of that culture like the stereotype of Americans maxing out on too much credit and digging a hole that's difficult to climb out of.

 

[clifp]

I think Fuego and DW are having the wool pulled over their eyes. They are frantically rationalizing how "helping" family will achieve the desired result. It's not going to work.

This will not end well.

I think Fuego understands the problem. He is between a rock and hard place. If DW says we should loan SIL money and he disagrees and something bad happens to her not only is the relationship between the sisters in trouble, but his relationship with his wife is seriously damaged.

How about the couple who loaned his SIL 12,000 and isn't even collecting interest. They are friends not family. I am more sympathetic because I have been around gambling addicts a lot and seen the pattern happen, and yes middle age Asian woman seem to have a special knack for getting themselves in way over their head.

Realistically, it doesn't sound like she is ready to quit gambling, at least not yet. So all you can do is attempt to minimize future losses in the intermediate term.

A couple of comments. The 10% interest a month is troubling although, in the old days juice use to be 10% a week. She absolutely needs to pay that debt and tell them she isn't going to pay them interest. Period, no interest, not now or ever and she won't pay it on any future loans. This will have the effect of cutting her off from important source of funds. They won't do anything bad to her to because she did pay of the debt, but the lost any profit, so probably no future marks. She should use her mom's money to pay them.

The husband needs to talk to the couple who he owes $12,000 to. (Ya, I know his wife owes it but... in sickness (and compulsive gambling qualifies) and health isn't that what the vows say?). He needs tell them, he will be paying them back but only on two conditions, they never ever loan her money again, and they start spreading the word to all of the poker games in town that his wife, isn't paying her marks. Most card games extend credit to regular customers (it is an easy way to get people to gamble more) but once word gets out that that B*tch Jane is marking (i.e. borrowing) all over town but she hasn't paid me a dime of the 12 large she owes me, games will cut her off.
Frankly if the husband isn't willing to confront the couple than, I think you have a good reason to wash your hands of the mess.

Finally, make sure to read up on the IRS rules regarding writing off bad debt to family members and structure your "loan" appropirately. After taxes, your out of pocket loss may only be $6,000 instead of $10,000.

 

[donheff]

Good advice from clifp, Fuego. If hubby won't follow that advice he doesn't real care. If SIL won't take it she is not thinking.

 

[IndependentlyPoor]

Isn't it true that if you forgive a loan and write it off your income tax, then the forgivee owes taxes on the forgiven amount as regular income?

 

[TromboneAl]

Complexity: SIL tries to renegotiate debt. Fuego evaluates SIL behavior and uses urinalysis to determine whether she has stopped gambling. After a period of time a loan is made from a number of different relatives, with carefully structured payments. The loan payments are monitored and enforced. Gold and other possessions are used as collateral for the loan.

Simplicy: SIL sells gold and other possessions and pays off debt. Learns lesson.

 

[NW-Bound]

Not to condone the irresponsible behavior of your gambling SIL, but as you probably already know, gambling is a pervasive problem in the Asian culture. A link here to add some perspective: Gambling, Addiction, and Asian Culture : Asian-Nation :: Asian American History, Demographics, & Issues

While this may be true, when walking through casinos I did not notice a higher percentage of game players being ethnic Asian. I thought most are Caucasian. One thing for sure is that the local Indian casinos were populated with elderly people definitely in retirement age. What you do all day, indeed!

Complexity: SIL tries to renegotiate debt. Fuego evaluates SIL behavior and uses urinalysis to determine whether she has stopped gambling. After a period of time a loan is made from a number of different relatives, with carefully structured payments. The loan payments are monitored and enforced. Gold and other possessions are used as collateral for the loan.

Simplicy: SIL sells gold and other possessions and pays off debt. Learns lesson.

I myself like simple.

 

[Texas Proud]

Finally, make sure to read up on the IRS rules regarding writing off bad debt to family members and structure your "loan" appropirately. After taxes, your out of pocket loss may only be $6,000 instead of $10,000.

Just to let you know... this is hard to do... you have to have terms and enforce them... you also have to try and collect... so if you are not willing to take them to court and get a judgement against them... and then try and get unprotected assets... well, you get the idea...

Now, you can always play audit roulette... and if you win....

 

[FUEGO]

The cynical part of my mind thinks that your SIL is planning on putting up with not gambling for a few weeks in order to get the $10.3K out of you.

Not to be "pun"-nish, but I'd guess she sees that as a very good bet.

So wait, all I have to do is dangle this carrot in front of her, and as long as I keep the carrot hanging there, she won't gamble to convince me that she won't gamble? That is basically what I plan on doing for a while. I doubt I will feel comfortable in six weeks to give her the money. Maybe I will, maybe I won't. It is a subjective decision. Maybe she'll find some other mark to extend her a mark.

If all it takes is me saying "not this month, you aren't ready, come back next month" to make her stop gambling, then I can do that!

 

[FUEGO]

I can just see it... MIL.. "No, I REALLY mean it this time".... as she writes another check to SIL...

But you did say that the big money only started a couple of months ago.. so it is not like this has happened before...

I am surprised at how people can waste away their money so quickly... I enjoy gambling a bit, but it usually goes so quickly I do not do it...

I don't know, MIL was pretty saddened when she saw the inch and a half thick stack of 20's and 100's that DW had just taken from MIL's account to hand over to gambler SIL. I'm glad MIL got to see the stack of cash to put in real terms what $12000 looks like.

The quote above that I bolded - this is something that I am considering too. The magnitude of the gambling was at a level that was wasteful for years, but no more so than other "wastes" of money. It was only in the last few months (as far as I know) that it reached these epic proportions. For years it was an entertainment expense. Recently it has come to the point of breaking down all family finances.

 

[FUEGO]

Complexity: SIL tries to renegotiate debt. Fuego evaluates SIL behavior and uses urinalysis to determine whether she has stopped gambling. After a period of time a loan is made from a number of different relatives, with carefully structured payments. The loan payments are monitored and enforced. Gold and other possessions are used as collateral for the loan.

Simplicy: SIL sells gold and other possessions and pays off debt. Learns lesson.

SIL only has $2000-3000 in gold, and not much else that would fetch anything. Maybe if she sold all personal property she owns on craigslist, she might get another $1000-2000. As you can see, she could sell everything she owns in her name and only raise enough to repay 10-20% of her debt.

Her husband knows she is spiraling the drain and refuses to put any more of their jointly titled possessions in hock to feed her habit. I can't say I blame him at this point. He is looking to the "what if's" of step 2 - distribution of assets in an equitable distribution during divorce proceedings. Maybe there will be something left to distribute...

 

[Westernskies]

So wait, all I have to do is dangle this carrot in front of her, and as long as I keep the carrot hanging there, she won't gamble to convince me that she won't gamble? That is basically what I plan on doing for a while. I doubt I will feel comfortable in six weeks to give her the money. Maybe I will, maybe I won't. It is a subjective decision. Maybe she'll find some other mark to extend her a mark.

If all it takes is me saying "not this month, you aren't ready, come back next month" to make her stop gambling, then I can do that!

Good plan! Bailout without payout- I love it!

 

[FUEGO]

A couple of comments. The 10% interest a month is troubling although, in the old days juice use to be 10% a week. She absolutely needs to pay that debt and tell them she isn't going to pay them interest. Period, no interest, not now or ever and she won't pay it on any future loans. This will have the effect of cutting her off from important source of funds. They won't do anything bad to her to because she did pay of the debt, but the lost any profit, so probably no future marks. She should use her mom's money to pay them.

The husband needs to talk to the couple who he owes $12,000 to. (Ya, I know his wife owes it but... in sickness (and compulsive gambling qualifies) and health isn't that what the vows say?). He needs tell them, he will be paying them back but only on two conditions, they never ever loan her money again, and they start spreading the word to all of the poker games in town that his wife, isn't paying her marks. Most card games extend credit to regular customers (it is an easy way to get people to gamble more) but once word gets out that that B*tch Jane is marking (i.e. borrowing) all over town but she hasn't paid me a dime of the 12 large she owes me, games will cut her off.
Frankly if the husband isn't willing to confront the couple than, I think you have a good reason to wash your hands of the mess.

Finally, make sure to read up on the IRS rules regarding writing off bad debt to family members and structure your "loan" appropirately. After taxes, your out of pocket loss may only be $6,000 instead of $10,000.

I have suggested to SIL that she renegotiate the terms of this debt. Tell them that she can't pay them any interest or even all the principal right now. There is nothing left. That saves her money, and gives her a black eye credit-wise with her fellow gamblers, so she is done gambling there. But she does not consider that an option. Which worries me. She doesn't want to lose her ability to gamble and borrow more.

Giving her bad credit with other gamblers was a big motivating factor in my decision to NOT giver her any money right now.

 

[FUEGO]

Good plan! Bailout without payout- I love it!

Exactly. Efficient use of limited economic resources.

 

[FUEGO]

Perhaps the gold chain is only really worth $70. Hey, if it's not an emergency to him, the he!! with putting up my money.

I would have also required, if I was hosting the intervention, that it be English only if at all possible.

Has it been mentioned how she specifically lost it gambling and how she owes different people?

I have seen the gold chain, and let's just say Mr T would be jealous. It looks like something you might use to haul a Jeep out of the mud (slight hyperbole there ).

Regarding using English - 2 of 6 participants speak limited English. 2 of 6 participants speak no Laos (me and SIL's husband - he's Vietnamese). So we switched up between English and Laos. It would not have made any sense to have MIL talk with SIL in English. It would have been 20 minutes of "You no good. You no borrow. You no gamble. Gamble bad. You no good." Ad infinitum.

For a summary of who was owed what gambling debts, see my summary of the intervention earlier. I think I posted it Saturday night or Sunday.

 

[Westernskies]

SIL only has $2000-3000 in gold

Maybe show MIL what 3K in 20's looks like against the gold jewelry; she may reconsider watching that % of her life savings go to a stranger. IMO, SIL should just (over) value the gold at X and give it and the difference to the kind hearted strangers that fleeced her out of her money. That would send the message " you got everythng, all the cash I could scrape up and even my gold jewelry- It's really all I can come up with. Sorry, but I won't be gambling with you ever again, I am so ashamed"

SIL's patent refusal to participate financially at any level up front (keep the gold, keep the car) and is relying on you and MIL to [-]enable her[/-] bail her out tells me she hasn't felt any financial pain, feels no shame, and isn't even close to getting the message.

 

[FUEGO]

I think Fuego and DW are having the wool pulled over their eyes. They are frantically rationalizing how "helping" family will achieve the desired result. It's not going to work.

This will not end well.

I don't think this is an accurate representation of my current understanding of this issue or the position I have taken. We have laid out our expectations and our position to SIL.

1. Don't gamble.
2. Gambling isn't a solution to getting out of debt.
3. Get help - join Gambler's Anonymous
4. When we are convinced SIL is done gambling, we will consider helping her out financially

Maybe it won't work. I don't think it will end "well" regardless of our actions. At this point it is best to hope for the least bad alternative. Which would be she quits gambling and digs herself out of the hole she is in. Whether she uses her hands to dig or we let her borrow our backhoe is still undecided.

 

[FUEGO]

Maybe show MIL what 3K in 20's looks like against the gold jewelry; she may reconsider watching that % of her life savings go to a stranger. IMO, SIL should just (over) value the gold at X and give it and the difference to the kind hearted strangers that fleeced her out of her money. That would send the message " you got everythng, all the cash I could scrape up and even my gold jewelry- It's really all I can come up with. Sorry, but I won't be gambling with you ever again, I am so ashamed"

SIL's patent refusal to participate financially at any level up front (keep the gold, keep the car) and is relying on you and MIL to [-]enable her[/-] bail her out tells me she hasn't felt any financial pain, feels no shame, and isn't even close to getting the message.

Giving the gold and a small amount of cash to the creditors is what we told SIL she should do. To no avail.

MIL has been keeping SIL's gold (what is left) probably at SIL's request to protect it from SIL herself! I think it is unofficially collateral for the $12000 loan. She can't sign over her car to anyone or get a loan on it. Her husband refuses to give up the possession. SIL is willing to give title to the car though. She can't without her husband also agreeing.

 

[NW-Bound]

...It would not have made any sense to have MIL talk with SIL in English. It would have been 20 minutes of "You no good. You no borrow. You no gamble. Gamble bad. You no good." Ad infinitum.

So, what's wrong with that? It keeps the discussion brief and to the point.

Yes, "You bad no good gambler!". "Shame on you!".

What's more to say?

PS. I wonder what SIL would have said. "I like gamble. Gamble is fun. I can make lots of money"?

 

[Leonidas]

4. When we are convinced SIL is done gambling, we will consider helping her out financially.

I hope you stick with that. From everything you related that went on in the intervention I think the likelihood of your SIL stopping at this point is minimal, and that's being charitable.

Addicts love their drug of choice more than anything.

It's only when their addiction starts to cost them those things and people they love that they will be forced make a choice between those things and people, and their true love. Some just have to see the loss coming, others have to actually suffer loss before they are confronted with their own disease.

Some ride it all the way to the bitter end. They'll use and betray everyone that ever loved them or tried to help them. The lure of the addiction is too strong for them.

Who knows which category your SIL is in. But she's not at the point at which she feels compelled to make the choice between gambling and her family. She just got a big chunk of cash from her mom and she's got hopes of getting more from you. The intervention was just some crap she had to put up with to get the money.

 

[NW-Bound]

Lest someone think I was making fun of people with a limited English vocabulary, I cannot imagine myself being able to make the above arguments in a foreign language like Greek or Farsi, for example.

The point I was making and hoping that is not lost is that, when stripped of all fancy words and euphemisms, many arguments break down or become superfluous when everyone including the perpetrator knows what is right or wrong. The less said may be better.

 

[FUEGO]

It's only when their addiction starts to cost them those things and people they love that they will be forced make a choice between those things and people, and their true love. Some just have to see the loss coming, others have to actually suffer loss before they are confronted with their own disease.

Well I hope the next few months gives her some time to reflect on what she wants to do with her life. Her marriage and her kids are on the line here, as are her good relations with her extended family.

The small things will all add up in her eyes I hope. Her son, the 14 year old, hid her car keys 2 weekends ago because he didn't want her to go out gambling. She found another paid she had hidden somewhere, so managed to go out gambling, but that should show her the severity of the situation - your own son hiding your car keys from you. The rest of her immediate and extended family refuse to attend any of these parties now.

And yesterday, SIL took my two daughters out strawberry picking at the local farm. Apparently while out strawberry picking, my 5 year old launches into a tirade against SIL about how gambling is bad, she is bad for gambling, and she needs to stop. Over and over. Quite a mouth on that 5 year old. But when your 5 year old niece is giving you advice like that, it is a sign. Time to hang it up and move on.

It will be interesting to see the mood at our next few family gatherings in May.

 

[Westernskies]

It will be interesting to see the mood at our next few family gatherings in May.

I'll lay you 3:1 odds that it will be tense, 2:1 odds that it will be strained and even money that it will be just OK.

 

[FUEGO]

I'll lay you 3:1 odds that it will be tense, 2:1 odds that it will be strained and even money that it will be just OK.

How about giving me an over/under on number of loud arguments I will hear re: gambling. 3.5? 4? I might take the over, and stir up some troubles myself.

 

[Westernskies]

How about giving me an over/under on number of loud arguments I will hear re: gambling. 3.5? 4? I might take the over, and stir up some troubles myself.

Time for an E-R poll, maybe?

 

[FUEGO]

Time for an E-R poll, maybe?

You offering to be the bookmaker on this one?