My SO's (hereby referred to as A,) insisted they loan us money to get into some college classes, further insisting it was the reasonable thing to do as A wouldn't charge us interest. We were afraid of student loans so we accepted the offer figuring we'd have a greater income to repay A after the classes.
Once those classes were over A insisted again that we repeat this to get into the next level at our new job. We agreed and A loaned us the money again. We were making regular small payments on the previous loan at this time and this added to those payments.
Throughout this process, my SO had vision and dental work done as they were still on A's insurance and A said we should do it now before the my SO has to find their own insurance. We agreed to make these payments over time as well, adding to the original payments.
Our vehicle started dying on us and we were unable to commute to work and school so A insisted they take us to buy our first new car, insisting on a relatively new SUV at sticker price. We now make regular payments on it as well.
Throughout this time A has been buying us pet supplies, school books, and other expensive things without consulting us beforehand, insisting we can just pay them off later. We started paying on those items as they arose.
When our dog passed away A said they would loan us the money to adopt from a pet store which charged over $800, and we knew it was a bad idea but it helped cushion the below of a passing loved one. We started paying on that as well.
I should state now that we had a feeling from the get-go that this wasn't going to turn out well, but my SO was unable to work due to illness and I was stuck in a dead end job making hardly enough to pay rent. I should also state that we rent from A as I moved in with my SO to be close to work. We took this as a sign of "let me help you get off your feet so you can get your own place."
We found out over time that A has always had bad spending habits and has been using us as an outlet to spend big without their spouse judging them. A's been hiding the totals from us and using a different credit card for nearly every purchase, opening new ones like unwrapping candy.
Additionally, the money we've been paying apparently hasn't been going towards paying off A's horde of credit cards, and the banks are starting to get upset.
A contacted their parent, (who shall be dubbed B,) in hopes that they would help dig A out of the pit they dug themselves into. B had recently married into wealth and decided to take out their own loan without telling their spouse either in order to pay off A's debt under the caveat that it all needs to be paid off within a year.
We had been working down the amount we had left to pay to only $2,000 and we're making arrangements to move out and away from A. (Unrelated, but A is narcissistic and harasses my SO whenever I'm not around, which has been preventing me from working my regular hours and directly preventing us from paying her back.)
On my SO's birthday A presented us with the results of the math A and B did without our knowing, starting not only that we owe B the $2,000 we were going to pay A, but that we also owe an additional $1,000 in interest for the previous year. (That's right, one year.)
The paper they gave us has the debts we've been paying on and unless they're charging us an interest rate of 28.28%, I cannot figure out where this $1,000 is coming from.
Additionally, any attempt to discuss the interest is met with a plain and simple "B had to take out a loan to pay it off." We did not agree to this and we were just a few days from finishing the payments!
We've been holding off on talking about it because we want into the new house before A is given any reason to throw threats around.
For anyone mathematically inclined, we'd supposedly accrued $3,479 in overall debt and $984 in interest according to the paper A gave us. It states specifically that the interest is for one years time.
We should be out of this house within the week, but when all of our belongings are moved I intend on calling B with the $2,000 and saying we'll pay it up front as we'd planned to, as we had not agreed on any other aspect of the situation. I expect a lot of backlash and was hoping someone could bring some reason to any of this.
(P.S.) I have had it suggested to me that they just did the math wrong and we're sticking us with all of A's acquired interest. A supposedly owed beyond $20,000 excluding what they loaned us.
(P.P.S) I'm dreadfully sorry for the extended document above, I was hoping to include any possible information one may ask for ahead of time to hasten an informed response.
Thank you all for your time, it really helps.