As more and more young people become swamped by bad mortgages, hefty student loans and credit card bills, their parents are attempting to shore up kids’ financial future by giving the gift of debt relief.
Instead of giving traditional holiday, graduation or birthday presents, many parents are now choosing to use the money they would have spent on gifts to pay down their children’s debts.
The trend is impacting both wealthy and middle-class families. On the high end of the spectrum, one tax attorney said he had helped dozens of New Jersey parents pay off their children’s mortgages. Most gifts are more modest – like an offer to make a couple months’ worth of student loan payments after graduation or a check sent to the credit card company in lieu of a birthday gift.
Many parents said they made these gifts out of legitimate concern for their children’s financial well-being. Indeed, the recession has hit America’s younger generation especially hard. Students have taken on record amounts of debt, but graduated into the worst job market in decade. Many of those who graduated before the recession have lost jobs and been forced to rely on credit cards to make ends meet.
All told, more than 60 percent of parents report providing some method of financial support to their adult children who are no longer enrolled in school.
Pursuing Debt Relief Through Bankruptcy
A gift from the parents is great if you can get it, but most families aren’t in the position to make significant payments on their children’s debt.
If you’re overwhelmed by mortgage payments, credit card debt or medical bills, sometimes bankruptcy can be the best debt relief option. Contact a New Jersey bankruptcy attorney to see is filing for bankruptcy is the right move for you.
Source: The Fiscal Times, “Why Parents Are Paying Off Their Kid’s Debt,” Caren Chesler, Dec. 21, 2011