Good morning Everyone,
I have an odd situation that has come up that I'm not entirely sure how to handle. My wife and I have been married for 9 months now and just bought a house last month. I am the financial "planner" for our household and run a pretty tight budget with aggressive loan payments and savings.
My wife and I have roughly $40kish in manageable debt.
Car Loan A $8k @ 5.2%
Car Loan B $11k @ 5.0%
Student Loans in wife's name $25k @ roughly 4.5%
We bring in roughly $75k post tax ($111k pre-tax) between the two of us: me-$75k, her-$36k (Approximately $6k per month). Our expenses are roughly $4.8k per month, which includes our automatic 401k and e-fund transfers. The remaining amount I typically move to our e-fund at the each month.
So, there is the background on our financial situation, which I can elaborate more on if needed. The development is that my in-laws just told us that they want us to start paying the "Parent student loans" that they took out for my wife for college.
This is the first time they have ever mentioned this. My wife was under the impression that we were only responsible for the student loans in her name (which would make sense). The Parent student loans are as follows:
- $13,351.70 7.9%
- $15,522.75 6.41%
- $11,981.01 7.2%
- $15,535.85 7.9%
The monthly payments for the "parent student loans" in total are $802.90 per month. They also have $62k out in "Parent student loans" for my brother-in-law, who is graduating in May.
My in-laws are saying that it was always the plan to have my wife pay off the loans that they took out for her schooling and that they can't afford to make payments on the "parent student loans" for both.
I'm horribly confused as to what to do because adding an additional $802.90 payment to our monthly budget just seems ridiculous and short sighted. We would have to cut our savings to make the payments while stopping the "snow ball method" of debt payment for our current debt. My in-laws (from what I can tell) are very poor with managing their money (They go on cruises every couple of months, have a boat and RV, and are members of their local country club).
My plan so far:
- Discuss with my wife further so that we are both on the same page with the situation.
- Have a call with the 4 of us tomorrow night to get information on the situation from my in-laws (their expectations, how it was communicated, why they never mentioned it before while we were wedding planning or saving for our home).
- Explain to them that we have to take care of our family and our obligations first (paying off our debt and establish solid financial security), before we even discuss us formally taking on any of the loans.
- Offer to pay $100-$200 a month in "good-faith" to try to help them out.
My questions are below:
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What is the best course of action here when discussing with them, as my wife is very sensitive and close to her parents?
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Are we legally/financially obligated to pay the loans?
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If we do contribute (even partially) would we be eligible for the tax write off for the loans or no, because they are in my in-laws names?
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Should we even offer to contribute to the loans, even though they aren't in our names?
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Do I have the right to be upset that my in-laws never brought this up to us or even myself during our engagement, house-buying, etc?
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How do I handle the "fall-out" from this situation as I feel this will hit my wife very hard (this is the first time she's having to really pushback on her parents).
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Are there options for my in-laws in order to reduce their monthly payments to something more manageable for them e.g. income-based payments?
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Is this even a normal thing or are my in-laws trying to take advantage of us?
Thanks everyone
Submitted April 04, 2018 at 12:05PM by justmakesomethingup7 https://ift.tt/2JfhMuV
