Earlier this week we discussed the rise of foreclosures among people 50 and older, including a significant increase for people 75+.
We cited some of the most common reasons, including the loss of savings, unemployment/underemployment, and falling property values. But as bankruptcy attorneys in Memphis, we see another major reason why older residents face foreclosure: the debt of their children.
Sometimes when children exceed their own credit limits, they look to their parents for more ways to spend. Parents and grandparents may help them sign for a new car or house, even when the child has no way to pay them back.
In some cases, the elder may not know their children or grandchildren don’t have the funds to cover the purchase. They also don’t always realize there’s almost no way out of this kind of debt.
It’s hard enough to get out of debt when it’s caused by your own spending habits. But when it’s not your fault, like when the debt belongs to your children but is recorded under your name, the results can be devastating.
Most of the time when children take out debt in their parents’ name, the amount exceeds what’s possible to pay back through a simple payment plan. These are very high debts; and there are times when the only way out is bankruptcy.
If you’re in this situation and wondering what options you have, talk with one of our attorneys. We understand that bankruptcy is a very difficult decision, and we’re happy to discuss the alternatives with you as you consider how to move forward.