I am loaning my ex-wife money to pay off her credit card consolidation loan. It will be repaid in 3 years but want to protect the principal and was thinking of taking out a term insurance policy. Is there perhaps a better way to guarantee return of my principal should she die before repayment? She's in her mid 50's and in pretty good health. Any suggetions appreciated.
Call me paranoid, but that's the last thing I'd ever think of doing. (When some one ask me how much insurance I carry I told them "enough to take care of my family, but not so much that my wife would actually be better off with me dead.")
Does she have any property you can take a lien on? If she dies before paying you off, will her estate have any assets at all to pay you? If not, I suggest you choose between not lending the money or taking that risk.
Joe
She is your ex, don't do it. That will protect your principal. If you parted friends, lending her money could change all that. What is she consolidating? Credit card debt? Only a crazy person would help someone with that. If a credit card company won't sign her up and let her transfer all of her balances, you shouldn't either. Have a happy Easter.
Suggest you listen to Joe. If you have a legal debt (signed note, amount, interest rate, etc.), you can proceed against her estate if she dies. And if she doesn't have any assets, her dying is way down the list of risks you're taking. And then there's this pesky recession...
If you disagree with us, I'd bump the loan principal by not only the life insurance premiums, but disability premiums, health insurance premiums and whatever other risks that could happen.
-HW "Skip" Weldon Columbia, SC
More for the archives but only as you are willing to share more info: What's the interest rate you're charging her? Late fees? Is the well- being of any children the two of you have involved in any way? Can you say about how much of a loan we're talking about and whether, if she went bankrupt, you would miss it?
This would not be the first time I have heard of relatives of one type or another making a mutually beneficial deal. OTOH, I try not to do any business over an amount of $25 with friends.
Happy Passover, Easter, Spring Solstice, life.
In my younger days I occasionally loaned money in the range of about $5.00 to $50.00 to friends and relatives. I cannot recall a single instance where I ever got the money back. All too often there is some confusion as to what is at first called a "loan" to, later on, being remembered as a "gift."
Nice people are often adept at turning things around for their own benefit when financial matters are involved.
As the saying goes, when you lend money to friends, you lose both your friends and your money.
I got repaid 2 out of 3 from my kids. Loaned 2 of my daughters enough to get them each into housing and over time (about 5-10 yrs) got every penny (but no interest) back. Never hassled them for it, but they felt they needed to pay it off.
Now about my son...
Chip
I agree with Don and Chip not knowing the amount etc.
I have not been too successful on recieving the $$ back, or at least so far I haven't. The loans are 7 to 10 years old, of course this is family and not ex family..
Good Luck.
?Is there perhaps a better way to guarantee return of my principal should she die before repayment??
If it is business, it needs collateral put up against risk, if the collateral does not exist, it?s a favor and you can?t hedge a favor, just be willing to accept the loss and move on :(
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