Dear Jeanne and Leonard: My family’s story could fill a season of “Dr. Phil.” In a nutshell, though, my elderly parents are flat broke, and my brother and I are struggling to supplement their Social Security and keep them going. What happened is, our sister sucked their savings dry, then ran up $21,000 in debts on their credit cards. Since there’s no possible way for our parents to pay off these debts, should we be informing the credit card companies of the situation? For what it’s worth, our sister is always broke, so she’s never going to repay anyone. And she’s in denial anyway.
– Holding it Together, California
Dear Together: “Denial” is too kind a word. Your sister has no conscience. So make certain she has no way to access your parents’ checking account and grab their Social Security payments. And if Sis has a job, see if you can have her paycheck garnished to pay down her debt to your parents. You shouldn’t hesitate to try to collect from the person who dug the hole your parents are now in.
As for contacting the credit card companies, hold off until you’ve spoken to an attorney. While your desire to level with your parents’ creditors is admirable, you wouldn’t want to inadvertently get your folks into any more trouble than they’re already in.
Dear Jeanne and Leonard: After getting bids from several contractors, I hired one to replace my oil burner and hot water heater with a high-efficiency gas boiler and indirect water heater. I paid him when the job was completed, but the new boiler never adequately heated our home. Long story short, the contractor ultimately realized that the unit he’d installed was too small, so he’s going to replace it with a larger one. Because the guy’s been decent about everything, I’ve decided to reimburse him for the cost of the second boiler. But since he’s the one who decided what size unit to install in the first place, I don’t think he should actually be expecting me to pay. Am I right? So you know, both boilers are the same price; the smaller one didn’t save me any money.
– Wondering, Albany
Dear Wondering: An attorney can tell you whether the contractor has a legal right to be paid for the new boiler. Ethically, however, he’d be wrong to bill you. Obviously he made a serious mistake when he chose the first boiler, and there’s no reason why he should expect you to bear the cost of correcting it.
Dear Jeanne and Leonard: Our children have been given a trust fund worth 200,000 pounds. My wife and I would like to borrow 50,000 pounds from it in order to reconfigure our flat so that the children will have a larger bedroom and playroom. Our plan is to repay the loan, with interest, whenever we sell the flat. We live in an up-and-coming part of London, so we believe this is a safe investment (our flat has increased in value substantially since we bought it, and these improvements will only add to its value). Our question is: Would it be wrong to borrow this money from our children? We’d prefer to borrow against our home. But we’re both freelancers, so banks are reluctant to lend to us.
– Tom, London
Dear Tom: Wrong? How can it be right for you to have your children make a loan that banks believe is too risky?
Look, kids don’t get many six-figure gifts, so you don’t want yours to lose a substantial portion of this one – either because the real estate market goes south (it wouldn’t be the first time) or because you’re overestimating how much value prospective buyers will assign to your improvements (it’s not as if you’re expanding your home).
Bottom line: Mitts off the trust.
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