My Sister Borrowed Money and Hasn’t Paid Me Back

Question: Several years ago my sister borrowed a significant amount of money from me to start a new business. She didn’t want me to tell the rest of our family and I honored her request. Now, several years later, she has yet to repay me the loan. She has made one payment but after that, nothing. I am angry and hurt. Do you think it would be violating our agreement if I told our family members about my loan and her non payment in order to get their support? I don’t want to ruin my relationship with my sister. Susan from AL

Answer: First, let me tell you that it was very kind of you to loan your sister the money to start her business. However, most people who give financial advice regarding loans to family members strongly recommend an explicit, legally written, repayment agreement so that this kind of sticky issue does not split families apart.

I can’t tell you what to do about this but let me give you some things to think about as you make your decision. You seem to value your relationship with your sister and want it to continue. Therefore, going to other family members before having a heart to heart talk with your sister about your feelings would be counterproductive.

Start by asking yourself whether there is a reason why she has not repaid you yet. Could it be that her business isn’t doing well or has failed and she just doesn’t have the money? Or perhaps she assumes you don’t need the money right now since you haven’t asked her for it. Maybe she is using her extra money for other things she needs either personally or for her business growth.

On the other hand, she may be taking advantage of your kindness and as I’ve said before, there is a high price in being too nice. So now is the time to sit down with your sister and have a “speak up” dialogue. You can start this conversation by owning your problem and then sharing your feelings.*

For example, you might say something like:
I’m having a hard time talking with you about something that has been on my mind. I love you and our relationship is very important to me. You know I would help you in any way I could. Several years back you borrowed a substantial amount of money from me. I thought you agreed to pay it back in regular monthly payments. Yet, I have only received one payment in the last 4 years. I’m feeling hurt and confused. Can you explain what’s going on?

Your sister will probably already feel defensive so stay calm and speak in as neutral a voice tone as possible. When done, stop talking and let her explain. You want answers, not to start a family war. Her response regarding your feelings and desire for repayment will determine your next step. Your sister may say things that help you understand a bigger dilemma she faces and why repayment at this time isn’t possible. Or, she might promise to start repaying the loan, at which point you will have to decide whether to ask her to put her promise into writing. On the other hand, if she makes lame excuses, dismisses your feelings or refuses to repay the loan, then you will have to choose whether to press this matter further with family members.

However, let me just add two additional cautions. I’m not a lawyer, but without anything in writing, it’s your word against hers as to whether this was a gift or a loan. Trying to extract a debt from someone who does not want to pay it back is difficult. Without legal documentation it is close to impossible. You’ll have to decide whether it’s worth letting the entire family know of your sister’s behavior. What will that cost?

Second, if your sister shows no concern for your feelings, then perhaps you are trying too hard to maintain a relationship with someone who doesn’t care about you and is not honest. If so, you may choose minister to your sister as Jesus calls us to love one another, even our enemies, but don’t think for a minute you have what it takes to share a close friendship together. That doesn’t mean you cannot participate together in family gatherings, however you would interact with her as a superficial acquaintance rather than a close friend.

More information on having “speak up” dialogues can be found in my book The Emotionally Destructive Relationship

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