how to protect our loan to family memember?

[Disabled Vet]

Hi Guys,

I have a question. My wife and I gave (loaned) our nephew 10,000 for his down payment on his new construction. This house will be done next month and they will be closing in Jan. Since this personal loan was done without the bank or anyone else in the family knowing about it. How can we protect ourselfs? I honestly can't remember if during the loan process if he can name us the benefactors of his home if something was to happen to him. We already have a signed document stating he owes this money to us. Then i got to thinking.... What if something happened to him... We would be out that money. If we had something giving us the right to sell his house or transfer the remaining amount owed to someone in the family who wants the house.

What is the best way to protect ourselves?

Thanks,
Michael

 

[army judge]

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Originally Posted by Unregistered
Hi Guys,

I have a question. My wife and I gave (loaned) our nephew 10,000 for his down payment on his new construction. This house will be done next month and they will be closing in Jan. Since this personal loan was done without the bank or anyone else in the family knowing about it. How can we protect ourselfs? I honestly can't remember if during the loan process if he can name us the benefactors of his home if something was to happen to him. We already have a signed document stating he owes this money to us. Then i got to thinking.... What if something happened to him... We would be out that money. If we had something giving us the right to sell his house or transfer the remaining amount owed to someone in the family who wants the house.

What is the best way to protect ourselves?

Thanks,
Michael
You missed two opportunities to protect yourself.
One, you should have said, I'm not loaning you the money.
Two, by not obtaining collateral and a promissory note before loaning him the money.
Now, your only protection is the note you claim he signed.
It won't protect you if he doesn't pay.
You'll still have to take him to court and sue him for the money.
Unfortunately, if he des before paying you off, you'll be left with a piece a paper.