Dear Penny: I Think My Wife Is a Predatory Lender

Dear Penny,

My wife lent money to a friend. I presumed we would accept the loss if it weren’t refunded, but my partner had other ideas. It turns out that the friend’s small business is collateral, with the stipulation that the borrower could become an employee if the business were taken.

The borrower has shaped payments, but not always on schedule, and apparently the entire extent is now due immediately.

My wife is preparing to claim the business, which she guesses she can run better than her friend does. Improbably, she doesn’t think this will harm their friendship.

Apparently, my wife was once litigated by her loving mother. She said they remained close throughout, and it was a good learning process. She showed me photos of herself and her mother together, both dressed businesslike, from the day she faced her in field. I’d like to ask my wife’s mothers about this, although I’d preferably not mention how it came up.

Back to the current situation: Is a court likely to enforce this? Might my partner be penalized for crafting what could be construed as predatory terms?

The contract appears to be notarized, and I wonder whether the notary considered this. I cannot give precise details of the contract, as I am not likely to have it in front of me while alone.


Dear M .,

I don’t care how beautifully your wife administered it when she was litigated by her own mother. I most mistrust her friend will react to being indicted by freely posing for a courtroom selfie. I can’t imagine what their working relationship would look like after that.

Let’s put aside the legality of this agreement for a second here. Your partner crafted an arrangement that you believe is predatory to take advantage of her friend. Regardless of whether it’s law, you don’t think it’s right. You have an obligation to speak up here.

I expected Justin Meyer, an Orlando-based attorney who practices business constitution whether the credit you describe could be construed as predatory, bearing in mind that we don’t know what state you’re in. Here’s what he had to say 😛 TAGEND

“I would worry about what the interest rate is, ” Meyer said. “Without knowing more about the situation, I can’t say if it is predatory or not. It is also important to note that each state defines greedy lending differently. Nonetheless, most moods panorama greedy lending as a consumer issue , not a business issue and if this can be saw a business loan, then there are generally fewer protections.”

According to Meyer, if your bride met the lend knowing her friend couldn’t afford to refund it, who is able to illegal, depending on the state and what the lend utilized for. But it is legal to use a business itself as collateral, even though it’s more common to use business assets, like real estate properties or armory. Located on the limited information you present, Meyer thinks this does sound like an enforceable agreement.

But the notary had no role in seeing sure this was a fair or enforceable contract. “The notary is not responsible for the text of the document, exclusively for ensuring that the people are who they say they are, ” Meyer said.

So where does this leave you? It doesn’t sound like you know all the terms of the agreement. So I’d indicate you and your bride sit down with an lawyer to review exactly what’s in that contract. That’s assuming, of course, that your partner is willing. She’s been less than upfront with you, so this isn’t a given.

It’s striking all the things you haven’t talked about. You knew your wife was lending fund, but you premised the two of you would eat the loss if necessary. Meanwhile, your bride was planning to take over her friend’s business. It sounds like it was only after you learned of her proposal that she mentioned that her mom formerly sued her. That seems like a moderately significant happen — one that you would have mentioned to your spouse.

I don’t know of a elegant route you can ask your mother-in-law about the time she indicted her daughter, but I’m curious what you’re hoping to find out here. It sounds like you have a nagging suspicion that your partner isn’t trustworthy. Are you hoping your inlaws’ explanation will squelch that surmise?

Past lawsuit aside, if you believe this loan was greedy, “youre supposed to” establish that case to your wife. Just because something is legal, that doesn’t make it right. Ask your spouse about her planneds. Is it to get refunded? Is it to become a business owner? Whatever the goal, can she achieve it without suing her friend and taken away from her business?

You may not win this one. But given attention if your partner doesn’t want to discuss details. Sometimes the more we mask, the more we discover. If your spouse doesn’t want you to know the terms of this contract, your bigger question is all the other things you don’t know about your wife.

Robin Hartill is a guaranteed financial planner and a elderly scribe at The Penny Hoarder. Send your tricky coin questions to AskPenny @thepennyhoarder. com.

This was originally published on The Penny Hoarder, which assistances millions of readers worldwide earn and save money by sharing unique job opportunities, personal legends, freebies and more. The Inc. 5000 graded The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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