Money

How should I deal with my family debt of 3.3 million

Bloomberg lowlowtc
Feb 4

I'm a new grad TC 150k. Net Worth -3.3million (from my family debt, with 10% interest rate each year) what should I do I'm desperate.

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  • This comment was deleted by original commenter.

    • Bloomberg lowlowtc
      OP
      it's my parents', and they're old they can't do anything about it now so I have to pay it
      Feb 4
    • VMware / Eng
      vLol

      VMwareEng

      PRE
      Wayfair
      vLolmore
      ? They can declare bankruptcy
      Feb 4
    • Amazon / MgmtKYuG83
      Why do you have to pay it? Do they owe it to the mafia or something?

      +1 to bankruptcy. Don’t make this harder than it has to be.
      Feb 4
    • ^ this. They can’t pass their debt onto you when they pass. And creditors can’t come after you or your assets.
      Feb 4
    • Amazon / Productgiju14
      Is this debt outside US? Otherwise it doeant make any sense. Tell them to file for bankruptcy?
      Feb 4
  • Apple csOE05
    It’s not your personal debt. Tell them to declare bankruptcy
    Feb 41
  • Airo Health eooB85
    Declare bankruptcy and start afresh. You’ll be paying that off for the rest of your life and the emotional baggage is just not worth it.

    10% is crazy. It is literally going up by 300,000 every year?! It’s going to be $3.6M next year? Are you kidding me, you’ll never get out of this no matter what you do. Your TC is less than half of the interest in liquid cash.

    The fuck man, I am stressed for you. You should seek legal advice for government provided lawyers and file for bankruptcy TODAY.
    Feb 43
    • Bloomberg lowlowtc
      OP
      I know right, it's stupid, I can't understand why my parents would agreed to this interest rate. and what is fucked up is they borrow the money from friends and relatives, not sure if declaring bankrupt would help
      Feb 4
    • Doesn’t sound like very good friends and relatives
      Feb 4
    • Airo Health eooB85
      Well break the problem down. One part is why your parents took it and that defines the formal/informal terms under which they took it. 2. Legal aspect, your family owes them money (you don’t) but you can solve this 100% by having them declare bankruptcy. 3. Their relationship with friends/relatives 4. Your relationship with relatives and with your parents.

      Figure out which of the above is most important and optimize for those. You could pick max 2 of the above tho history would advise you to pick 1. Under no circumstance should you pick more than 2.
      Feb 4
  • Google Mmkaay
    Interested to know how your family ended up there
    Feb 45
    • Airbnb avqx65
      Box spreads
      Feb 4
    • Bloomberg lowlowtc
      OP
      because my parents are kind of stupid they borrow the money to invest in their restaurant together with a friend of them, and the restaurant has been making negative profit in 4 years and the friend was sneaky af he scamed my parents in the contract making my parents bearing all the loss + the money borrowed. And they are my parents, so I have to help them pay the debt.
      Feb 4
    • Google Mmkaay
      You don’t have to help them that way. Let them declare bankruptcy even if the had to lose their house and you can help them buy another house with a portion of that $3.3 million
      Feb 4
    • Amazon MiaKalifa
      Bitcoin
      Feb 4
    • Amazon WSB
      @avqx65 Good to see fellow from WSB in the wild.
      Feb 4
  • Amazon Hoobastank
    Also, 10% is pure loansharking. Someone should do serious time for that.
    Feb 43
    • Amazon / MgmtKYuG83
      It sounds like this is actually loansharking.
      Feb 4
    • Amazon Hoobastank
      How do you declare bankruptcy with a loan shark? 😂
      Feb 4
    • Amazon MiaKalifa
      Using cement shoes I suspect
      Feb 4
  • Amazon / MgmtKYuG83
    Let me see if i grok this.

    So your parents owe personal debts to other individuals closely intertwined in the community. Not credit card companies or banks. While bankruptcy is an option, it seems that that is a nuclear option that will result in them and you being disenfranchised from all your friends and families, and you will be social outcasts. And the friends will still be expecting money forever.

    No one can legally compel you to pay. The friends/family can legally compel your parents to pay, and if they file bankruptcy, then the debts will be discharged under a set of court-mandated terms and encumbrances.

    It sounds like you are being compelled to pay out of social duty. When you say you “have to pay,” is that what you mean?

    Look, 3.3M is a lot. If you pay, you will be crippled with debt for decades that grows at a rate beyond what you can pay, and you will in turn rob your own children of a future, if you can even afford to have children which you likely will not. If you do not pay, it will cause a lot of pain amongst you and your family and you may essentially have to start a completely new life as a result of this.

    I would not pay it. Bite the bullet, yank the bandaid now, make it clear to your parents and anyone who asks that it is not your debt to pay and you cannot bear it. You will likely be disowned for doing so. But if you agree to pay the debt, you will be disowning yourself from your own future and ruin your life, and still never pay the debt that grows at 10% this year.
    Feb 43
    • Uber himu00
      Amen
      Feb 4
    • Okta nfc
      Nailed it.
      Feb 4
    • Adobe / Eng
      abcdxyz123

      AdobeEng

      PRE
      Yahoo, PayPal
      BIO
      Software engineer architect manager big data platforms
      abcdxyz123more
      👆👌
      Feb 4
  • Bank of America Quackers
    What do you mean family debt? Also, bankrupt and start frsh
    Feb 44
    • Bloomberg lowlowtc
      OP
      how does declare bankrupt work? if they declare bankrupt they don't have to pay? the fucked up part is they borrow the money from friends and relatives
      Feb 4
    • VMware / Eng
      vLol

      VMwareEng

      PRE
      Wayfair
      vLolmore
      Looks like you shouldn't feed into that, then.
      Feb 4
    • Oracle St4587qw
      So they borrowed from friends/relatives and still need to pay 10% interest????They should file bankruptcy as it’s not friends & relatives relationship anymore. I would feel some obligations if they borrowed interests free, but not with 10% interests.
      Feb 4
    • New flippy
      Assuming it's in a country with laws like the US, bankruptcy works like this:

      A court appointed trustee audits everything they have and everything they owe. Values their house, savings, everything. Totals up all the debts they owe as well.

      Then the trustee sells off all the assets and pays back the creditors as much as possible. Trustee figures out how to divide it. Creditors will only be getting part of what they are owed.

      Then there may be an ongoing payment plan where the trustee looks at their actual income and figures out how much they can really afford to pay every month without starving to death. They will be ordered to pay that amount for a few years. How long depends on the country or state.

      Then when that's all done all the debts are just erased and they get a fresh start, poor, but debt free. The creditors will not have gotten all their money back, only what can reasonably be paid, and the creditors will not be allowed to try to collect any more. It will all be over.

      Usually a few assets are "protected from bankruptcy". You might not have to sell your home, or may be able to keep a pension. What is protected varies from state to state or country to country.

      You would want to look into the exact rules in the country and state where they live.
      Feb 4
  • Amazon lolwhat
    Declare bankruptcy.
    Best way to get outta debt.
    There's no way you can pay it off of the interest is 10% - it's gonna double every 7 years at that rate.
    Sell everything you can sell, declare bankruptcy, become debt free, start new life.
    Read The Art of The Deal about how to declare multiple bankruptcies to become prosperous.
    Feb 42
    • Bloomberg lowlowtc
      OP
      how does declare bankrupt work? if they declare bankrupt they don't have to pay? the fucked up part is they borrow the money from friends and relatives
      Feb 4
    • Amazon lolwhat
      Money borrowed from friends and relatives is not legal debt. You can just forget / ignore it.
      And you can declare bankruptcy for the bank loans - find a lawyer.
      And for any money borrowed from goons - well, you gotta flee the country, there's no other way to escape it.
      Feb 4
  • Amazon / EngjHUS45
    Troll
    Feb 40
  • Microsoft USPatriot
    150k is low TC? Puh-lease.
    Feb 40
  • Amazon MiaKalifa
    Cry at your desk
    Feb 42
    • New bund
      Do you love watermelons
      Feb 4
    • Amazon MiaKalifa
      Why watermelons
      Feb 4
  • New DuQvV7x
    There is no such thing as family debt

    You cannot declare bankruptcy if it’s not your debt

    No one can provide good answers without more data from you.
    Feb 42
    • Bloomberg lowlowtc
      OP
      because my parents are kind of stupid they borrow the money to invest in their restaurant together with a friend of them, and the restaurant has been making negative profit in 4 years and the friend was sneaky af he scamed my parents in the contract making my parents bearing all the loss + the money borrowed. And they are my parents, so I have to help them pay the debt. They borrowed the money from friends and relatives (what kind of friends, fuck).
      Feb 4
    • New DuQvV7x
      Congratulations.

      This means you have 0 debt.

      Advice your parents to file bankruptcy
      Feb 4
  • PG&E Zerious
    In a lot of places in the developing world. Family debt means they know where your family lives...
    Feb 40
  • New x3b5
    How much did they borrow initially? How many years ago? The interest alone is adding an extra $300k of debt this year, so the initial loan was what, $2.5 million?

    “Friends and family” wouldn’t keep adding that type of interest into a failed business loan. What are the business assets worth? Can you sell them off for $2 mil and pay off most of the initial loan?

    Have the friend cut the accumulated interest down from $800k to $200k and stop interest in exchange for their good faith effort to pay it back and have them work on paying back the remaining $700k over the next 10 years.

    I mean if you really care that much about the relationship. Bankruptcy is totally an option since it was a business loan for a business that went south. Investors know full well they stand to lose money when lending. That’s literally the reason the interest rate was so high.
    Feb 40
  • Uber himu00
    Your family needs to contact a bankruptcy lawyer. If you feel indebted to them and want to help, maybe help pay for the lawyer?
    Feb 40
  • Cisco vzIq77
    Family debt? Sounds like bullshit to me. If it’s not legally your responsibility, there is nothing they can do to make you pay it.
    Feb 42
    • Bloomberg lowlowtc
      OP
      that is true, but in the end they are still my parents
      Feb 4
    • Cisco vzIq77
      The debt will die with them. No reason for you to worry about it.
      Feb 4
  • Chase / Mgmtgrizzlyed
    is that rupees? cause that is the only thing that makes sense to me. no way you could rack up 3.3MM USD in unsecured debt
    Feb 41
    • Bloomberg lowlowtc
      OP
      no it's 22million rmb which is roughly 3.3million usd
      Feb 4
  • New / Eng
    Blu3

    NewEng

    PRE
    Apple
    Blu3more
    —nvm didn’t read this was in China..

    Idk if anyone mentioned this but before declaring bankruptcy, make sure all assets that aren’t associated or locked as collateral to the debt are transferred to you and/or someone else (maybe friends or relatives that don’t have legal protection to being compensated for their lending). Speak to a lawyer/accountant about transferring these assets/money in low denominations such that it’s categorized as a gift and you don’t have to report it for taxes.

    Once their assets are removed, declare bankruptcy so that as much as possible isn’t scooped up by their lenders. I.e, if by some miracle their house doesn’t belong to the bank, it can be transferred to your name they won’t lose it in bankruptcy.
    Feb 40
  • Microsoft pJcW86
    You all have terrible reading comprehension
    Feb 40
  • Facebook public2
    Are your parents the trumps?
    Feb 44
    • Google trolDtrols
      Are you a libtard ?
      Feb 4
    • Facebook public2
      Idk what that is but sure. Sorry if you my hilarious joke hurt you snowflake :)
      Feb 4
    • Google trolDtrols
      I wish you were joking, but I have heard enough people say trump is not rich enough or not a super successful person.
      So I know that some people, whom I lovingly refer to as libtards, truly believe it.
      Feb 4
    • Facebook public2
      No one said he isn't rich, the joke was based on his multiple bankrupties and clear business incompetence/fraud. Maybe ops parents were trumps working on their latest golden casino was the joke. Which part do you not believe?
      Feb 4
  • Chase / Mgmtgrizzlyed
    Are they in the US? whats the liquidation value of the restaurant, hoping 3MM includes some real estate?? Cant just be build out of a single restaurant can it?
    Feb 42
    • Bloomberg lowlowtc
      OP
      They are in China. It's five years of continuous investment into the restaurant. They are kind of superstitious and they failed the business many times thinking maybe it's the structure of the restaurant, it's against the FengShui, and they remodelled the restaurant about every year which cost a shit ton of money which they borrowed
      Feb 4
    • Chase / Mgmtgrizzlyed
      oh man, sorry that sucks!
      Feb 4
  • New bund
    You must be trolling to all blinders. 3.3 million rupees isn’t large amount. We all took loan to study here and paid it back.
    Feb 41
    • LexisNexis Risk Solutions XgsJva6
      OP isn't Indian. He/She mentioned the amount in RMB (Chinese currency) in one of the comments.
      Feb 4
  • Bloomberg lowlowtc
    OP
    Guys, thank you for your advice, I'm seriously looking into letting them declare bankrupt right now
    Feb 41
    • New DuQvV7x
      If this is RMB then the money was loaned in a different country and different bankruptcy laws applies.

      I’m skeptical about the veracity of this question because this is a material part of the discussion that was not disclosed.

      Either way, best of luck.
      Feb 4
  • This comment was deleted by original commenter.

  • Are you from an Asian cultural background? That sounds familar. A Chinese friend had this thing called “tontine”.
    Feb 40
  • Amazon / Engsos567
    It depends on if you want to maintain relationship with those creditors (family and friends). I don’t see a viable way to repay it with that interest. You can negotiate with them to pay a part of it and no interest.

    I know of a similar story in my family in india. One of my relative took $1M usd from another relative at 24% interest. He invested in real estate during boom. But due to local politics, land fell in court litigation and he couldn’t pay. He declared bankruptcy, paid 50% of originally amount. After years of asking him to repay, the creditors gave up and semi-happy that they got atleast half of original amount. Now he has less friends and nowhere to be seen. I don’t completely blame him as there is no way for him to pay with his low paying job and same time taking care of family
    Feb 40
  • Salesforce op
    Everyone giving bankruptcy advises as if China followed American law.
    OP should check with Chinese lawyer what are the options there unless his parents already in the US as permanent residents.

    Another thing is, these 3.3 mil are in private debt and sum is huge for China comparing to avg income. What's the chance for OP and his parents to live long enough to benefit from the bankruptcy? One can hire criminals for fraction of that debt to make life of OP's parents miserable or short enough that bankruptcy may simply not be an option.
    Feb 40
  • American Express / Eng
    GoJava

    American ExpressEng

    PRE
    JPMorgan Chase & Co., Bank of America
    GoJavamore
    Other than declaring bankruptcy make sure to not make your parents loan your loan by even making a single payment from your account. Not an expert on how else the loan would become your obligation so check with a lawyer/financial planner.
    Feb 40
  • Apple Hansel2
    Which country?
    Feb 40
  • Microsoft pJcW86
    You are never going to be able to pay this off dude, you're screwed.

    You shouldn't touch it or pay anything off. If this is legit ie. Creditors then tell your parents to pay it off or declare bankruptcy, not your problem. If this is family or non-institutional or whatever money if you pay then there are records of you and they will chase after you for the rest of your life so you should just skip town and cut them off forever unless you want to pretty much be slave labor the rest of your life.
    Feb 40
  • Tektronix / Sales
    BlueBerd

    TektronixSales

    PRE
    Oracle
    BlueBerdmore
    Talk to a financial planner or specialist.
    Feb 40

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