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Tuesday, February 16, 2010

When Your Relative's Financial Problems Affect Your Marriage

As a psychotherapist in NYC, who works with individuals and couples, I have been hearing more and more from individuals and couples about the adverse impact that the recession has had on their relationships. Even for couples who have been fortunate enough not to have lost their jobs, they are often dealing with relatives who are in dire financial straits. It's often difficult to turn down requests for financial help from your mother, father, brother, sister, son or daughter.


When Your Relative's Financial Problems Affect Your Marriage

You might want to help, but what if the situation is adversely affecting your relationship, either because you and your spouse don't agree about lending the money or because you've been lending your relative money and it's becoming too much of a hardship for you--and there seems to be no relief or end in sight?

How do you and your spouse decide what to do?

How do you keep this type of situation from ruining your relationship?

There are no easy one-size fits all answers to these questions that many couples are now facing. Maybe your brother lost his job and he can no longer pay his mortgage, or your mother can no longer afford to pay her rent, or your sister has asked you and your spouse for money because the court is about to issue a judgment against her and freeze her bank accounts due to unpaid credit card debt. There are so many other variations on these types of situations.

Not only do these situations often place an emotional strain on a couple's relationship, but it also puts a strain on the relationship between the relative who is lending the money and the one who is borrowing it. The person who is lending the money might feel anxiety as to whether he or she will ever see this money back again. And the relative who is receiving the money often feels ashamed for having to ask. Then, there is the question of whether the person who is lending the money has the right to tell the borrower how to spend the money.

The following is a vignette, which is a composite of several actual cases from the past with all identifying information changed to protect confidentiality, that will serve to illustrate some of the complications involved in these types of situations:

Jane and Alex:

When Jane and Alex, who were married for over 20 years, began marriage counseling, they were barely speaking to each other. They started marriage counseling because Alex's son, Bob, from Alex's first marriage, borrowed a sizable amount of money from them more than a year ago, and Bob was not making any attempt to pay them back, even though he started a new job.

When Your Relative's Financial Problems Affect Your Marriage

Initially, after Alex lost his job, he and his wife could no longer make ends meet on her part-time salary. The bills began to pile up and they were taking out cash advances on their credit cards. When that proved to be too costly, Bob approached Alex and asked for $20,000 to pay off his bills and meet basic expenses. Alex told Bob that he would need to talk this over with Jane. Jane thought the amount was too high and suggested that Alex lend Bob only $10,000. Initially, Alex agreed to this, but when he talked to Bob, Bob pleaded with him, telling him that he needed the full $20,000 because he feared that he would lose his house if he continued to miss mortgage payments.

Alex felt caught in the middle between Bob and Jane. He wanted to help his son and his daughter-in-law, but he didn't want to upset his wife. Alex and Jane talked about this and went back and forth about it for a while.

When they came to speak to me, they both agreed on the story until that point. After that, they each had a different recollection of what happened. According to Alex, he and Jane came to a decision that they would lend the money to Bob and tell him that he could pay them back when Bob and his wife were in a better financial situation. According to Jane, she and Alex agreed to lend the money to Bob, but they wanted Bob to sign an agreement that he would start to pay back the money once he began working. Each of them insisted on his or her version of the story.

They both agreed that the problem between them developed after Bob started working again. Instead of starting to pay Alex and Jane back, Bob chose to invest what was left of the money. Not only did Bob not make an effort to pay back the money to Alex and Jane, he never mentioned it again.

At that point, Alex felt hurt and Jane was enraged. Even though part of the $20,000 was her money too, she felt awkward talking to Bob about it and insisted that Alex talk to Bob. She was also angry because she thought that she and Alex had agreed on specific terms for Bob repaying the money. She felt that Alex was being too passive with Bob and that Bob was taking advantage of their generosity. She and Alex began arguing about this situation and it was causing a rift in their marriage.

After several marriage counseling sessions, Alex agreed that it would be best if he was the one who approached Bob. Although he felt very uncomfortable bringing up the loan with Bob, Alex didn't want this situation to continue to come between him and Jane any more than it already had.

The following week when Alex and Jane came for their next session, Alex reported that when he approached Bob about the money, Bob told him that he thought the money was a gift--he never realized that Alex wanted him to pay him back. Alex said that he was stunned. Jane was extremely angry about this. Alex admitted that, when he lent the money to Bob, he was very unclear about it and, although it seemed surprising to him that Bob would assume that it was a gift, he could see where his lack of clarity might have caused Bob to think this.

Based on our working on this issue in the marriage counseling sessions, Alex was careful not to make it seem that Jane was the only one who wanted the money back. It would have been easy for Alex to try to make Jane seem like the "heavy" to try to preserve his relationship with Bob. Although Bob wasn't happy about it, he agreed to various terms of repayment and began to repay back the loan. For a while, this placed a strain on the father-son relationship between Alex and Bob, but they eventually worked it out.

In the meantime, once Bob began paying back the money, the tension between Jane and Alex began to ease. They learned to improve their communication with each other and agreed that if ever they found themselves in this type of situation again with either of their relatives, they would approach it with much more clarity and mutual understanding.

Jane and Alex Worked Out Their Issues in Couples Counseling

Often, what begins as a gesture of kindness and good will to help a family member can turn into a tension-filled situation for everyone involved.

Here are some tips if you and your spouse decide to lend money to a friend or relative:
  • Make sure that you both agree on the situation beforehand.
  • Never go behind your spouse's back to lend money to a relative because this can cause serious problems in a relationship.
  • Make sure that you and your spouse understand what the money is for before you make the loan.
  • Make sure the relative who is the borrower is clear that this is a loan and not a gift.
  • Be clear about what your expectations are with regard to repayment and, even though it might sound cold, it's often best to put terms in writing, if only for the sake of clarity.

Getting Help in Therapy
If you and your spouse are having difficulties about money that you've lent to a friend or relative, you might benefit from sorting out this issue in marriage counseling.

When choosing a couples counselor, make sure you see a licensed mental health professional.

I am licensed NYC psychotherapist who works with individuals and couples.

I have helped many couples to work out emotional issues.

To find out more about me, visit my website: Josephine Ferraro, LCSW - NYC Psychotherapist

To set up a consultation, call me at (212) 726-1006 or send an email: josephineolivia@aol.com.