A financial advisor borrowed money from my elderly parents as a "personal loan", now she is unable to repay in full. What do we do?

Thanks for the advice. The advisor is playing the "illness" card with us and saying she's back in chemotherapy and unable to work. As a human I feel for her, but bottom line is that she borrowed money. Being an only child and living away from my parents it was difficult, now that they are living 20 minutes away I am able to be more involved with their finances and that is how I discovered this so called loan. We have already taken care of a number of other money issues now that we have Power of Attorney.

Excellent advice, LynnPO!

This is elder abuse. Any financial advisor would not borrow money from his/her client. This "advisor" definitely took advantage of your parents. Call your local area agency on aging immediately and ask them which legal authorities to contact regarding elder abuse. Do not count on the life insurance, if your parents are not officially named beneficiaries on the policy they have NO legal claim to it. The return of the $10,000 sets a precident that this woman knows she has a debt to your parents. I hope you have an email or something from her that states she'll repay the remaining $37,000. If it were my parents, I'd seek help from the police and district attorney to get the $37000. You can place a lien on her home, vehicle, valuables like art, antiques - even her estate. DO IT NOW to protect your parents. AND - if your parents have enough money that they are okay making a $47000 loan, then THEY need a REAL financial advisor and trusted, legally bonded, attorney, Power of Attorney - SOMEONE to handle their finances and other business affairs. If they were used once, they are vulnerable to be used again. Don't be afraid to stick your nose in for their own good!

Thanks for your response. There was a paper (non legal document) that my mother showed us but to me it's just a document that says basically nothing.
We have an email that we sent to her in March requesting the loan be paid pack since it was the date she said she would pay it by, then my parents get a $10,000 check from her saying that because of her illness she couldn't pay the rest but would by June 30. Well guess what the other $37,000 is stil out there and now she's saying that she will do her best and her life insurance will pay it if she dies. This is all so frustrating.
We have talked with both parents and i think they understand. Father has dementia which makes it even worse. I feel this person has taken advantage of them and who knows...maybe others.
Thanks for your response. It reinforces exactly what I was thinking.

Seek legal counsel immediately. Was there any "paperwork" to document this exchange? I hope so. (the "life insurance" thing sounds fishy too.)
Your parents need to be repaid immediately....otherwise, it is theft.
good luck

PS: do you have Power of Attorney for your parents? If not, do so immediately. Then you can access their financial information to see if they are giving "loans" to others. Also, have a long talk with your parents about unscrupulous people who will try to prey on their kindness. Ask them to talk with you first if they feel the need to "fund" another venture.