Two extremes

Alan's mom has a big problem, and he's not sure how to handle things. Dave talks Alan through a tough situation involving theft and a family member.

QUESTION: Alan’s mom has been handling his finances while he finishes college. Recently, he discovered she has been stealing from his student loan money to spend on things for herself. Alan estimates his mom has taken around $12,000. He asks Dave how he should handle the situation, but Dave explains there’s no easy answer to this one.

ANSWER: The first thing you need to do is take over complete and total control of all your finances. Shut down any accounts that have her name on them, and anything else financially-related that she can access. I know this sounds harsh, but she has proven she’s just not trustworthy. It’s a hard thing to hear about a parent, but at this point you’ve got to take steps to protect yourself. What she has been doing is financial child abuse.

One extreme is to press criminal charges. The other extreme is to just forget it, and pay it. In between is a promise from her to repay everything she has taken, but she’s already out of control. That’s a promise that wouldn’t be kept. The problem with prosecuting someone criminally for this type of action is the money’s already gone, and it doesn’t magically make them have the means with which to pay you back. Plus, I’m afraid you’d have a really hard time legally getting the student loans removed from your name due to theft.

Under the circumstances, I think you’re probably going to end up eating this. Try to have a calm, clear discussion about what has happened, and why it happened. Let her know, without a doubt, that you will criminally prosecute her if she ever uses your name to put money into her own pocket again. Second, tell her you’re prepared to forgive her and forget about it if she agrees to get some financial counseling. If you want, let her know she can just pay you back somewhere down the road if she is able.

Try to get her some help, Alan.