Ask Dr. Gramma Karen: Grandson Is Not Paying Back Grandfather’s Loan

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One of my grandchildren is 26-year-old Joshua. His parents divorced when he was young. He grew up without any financial advantages. He never went to college, but his friends describe him as brilliant and a genius. I describe him as a hustler, an entrepreneurial risk-taker, and a bit of a wise guy. 

A few years ago he asked me for a loan so he could start his own business. I loaned him the money and he committed to repaying it in two years. He now appears to be making a good amount of money, certainly enough to repay his loan. But not only has he not mentioned or repaid the loan, he suggested I co-sign a loan from a bank for the same amount he borrowed from us. He persuasively argued that repaying such a loan would earn him a credit rating and that he would use the bank loan to repay what he borrowed.

I co-signed for the bank loan, but he’s never repaid me a cent on either my direct loan to him or the bank loan. I have been reluctant to push him to repay the loan, and he is not eager to discuss the matter, as evidenced by his not showing up for family dinners. I am concerned that anything I say or do about this will alienate him from me; he is probably counting on this. I am also extremely concerned that he’s not behaving responsibly. I am very sad and distressed by his behavior and my inability to act clearly and decisively.

A friend who is a practicing psychiatrist says Joshua will not change, so I should not even try. Instead, she suggests that I tell Joshua I am going to deduct the amount of his loan from his inheritance. She thinks this allows me to be fair, kind, and transparent – still holding him to a standard of responsible behavior – while putting away the elephant-in-the-room.

I would like your thoughts on this.

I agree with everything your psychiatrist friend says. Perhaps a part of you agrees with her advice, too? If so, I would suggest you put your time and energy into trying to understand what is preventing you from accepting her advice. After all, her strategy does seem to meet your need to be fair and kind and to be true to something important to you –  that is, making your grandson, if not directly responsible for his behavior, at least accountable. He will experience firsthand that his decisions have consequences.

Perhaps you continue to harbor some hope about how Joshua should behave, but as long as you hang onto those shoulds, you will probably find your sadness and distress increase rather than abate. Joshua probably has his own set of shoulds for you, e.g., “Grandfather, as a man of means, you should give me money.” You tried to accommodate him, but as you have learned, he plays by a different set of rules and does not honor his commitments.

I will repeat myself: I suggest you ponder why you are not able to embrace your psychiatrist friend’s advice. Your peace of mind resides in accepting her advice, not, as you well know, in lamenting what you see as Joshua’s shortcomings and his unacceptable behavior. Chances are Joshua will not make any life-significant changes for you. He can dabble at doing so to keep you hopeful, but you and your grandson have different core values and ideas about what is acceptable and unacceptable – I venture to say the differences in the core values between the two of you are unbridgeable.

Quite simply, my advice is that you stay true to your core values and do what you believe is best for you and the loved ones in your life who share your values. Be pleasant and kind towards Joshua, but accept that he has been source of disappointment for you and will most likely continue to be one: you have no reason to believe that will change. He is who he is.

All the negative emotions you’re feeling about Joshua might subside as soon as you say to him, “Here is what I have decided is going to happen. It’s not negotiable.” Will he try to punish you by not showing up at various family gatherings – a form of withholding love and affection? Maybe, but alas, you have already experienced this kind of manipulation by him, and you know you can survive it.

I know I am not sharing with you anything that others have not already suggested, but I hope hearing it from an outsider who has no agenda but to try to help you find peace of mind with this distressing situation is in some small way helpful.

Grandfather’s response to my advice:

Thanks for your very sage and practical advice. My plan is to go forward with my psychiatrist friend’s suggestion — to deduct from Joshua’s inheritance the amount due me plus the normal bank-rate interest (17% per annum) on the loan that will accrue during the years between when the loan was due (two years ago) and when my second wife and I expire.

At that rate, if we live, say, 20 more years, it would be about five doublings of his indebtedness, or enough to seriously diminish or even wipe out his sizable inheritance. There is satisfaction in this solution for me because it is fair to my core values, and provides me a bitter-sweetness as the years roll by reminding him of his loss. Of course, he will then have a reason to prefer my demise sooner rather than later. Nevertheless, it feels right.

Ask Dr. Gramma Karen is published every other Tuesday.
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