How to Help a Son or Daughter out of Debt
It's natural for a parent to want to reach out and help a child who's in debt. In doing so, make sure you are helping him or her curb any unhealthy spending habits, and be sure to protect yourself.
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Instructions
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Offer to help your son or daughter out of debt.
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Make sure he or she wants your assistance.
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Determine how much money your son or daughter needs to get out of debt.
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Determine how much money you can afford to loan or give.
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Decide whether you wish to loan or give the money.
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Consider giving them something of value that they can sell to raise money.
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Consider giving them a portion of their inheritance in lieu of a loan.
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Tips & Warnings
Consider paying creditors directly rather than giving money to your child.
If you loan money, write a promissory note to legitimize the transaction and to have a record for tax purposes.
If you give them money, keep a copy of your cancelled check. If you give more than $10,000 per year, look into tax implications.
Take steps to confirm that your child will not go right back into debt once you help him.
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Comments
View all 11 Comments-
cmstubblefield
Feb 22, 2009
This is so true..I just went thru the same steps with my father.. He has helped me pay off my credit card bill, but since then he only gives me a limited dollar amount to teach me how to live within my means!!!! -
ronahshouse
Dec 30, 2009
Wow... will you be my dad? Just kidding... but I think if the parents have the income to help their children they should but it should come with their child having to pay them back. I dont believe in teaching a child to mess up and we will bail you out.
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ronahshouse
Dec 30, 2009
Wow... will you be my dad? Just kidding... but I think if the parents have the income to help their children they should but it should come with their child having to pay them back. I dont believe in teaching a child to mess up and we will bail you out.
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Cherrie
Nov 15, 2008
I agree that handouts are not the solution. If really needed the promissory note should be written on the basis how the repay will occur. An additional job can be the basis, or selling something and repaying by such and such date. The special circumstances will dictate. Parents remain educators throughout life, a good example works the best.
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Cherrie
Nov 15, 2008
I agree that handouts are not the solution. If really needed the promissory note should be written on the basis how the repay will occur. An additional job can be the basis, or selling something and repaying by such and such date. The special circumstances will dictate. Parents remain educators throughout life, a good example works the best.
