A Parent's Responsibility to a Child's Debt

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Adult children sometimes call home asking for help paying off their debts, whether these are on credit cards, car loans, utility bills or student loans. There are a few cases in which parents are legally responsible for the debts of their children, but these are because the parent has signed a contract assuming responsibility. In most other cases, parents can choose whether they want to help their children pay off debts.

Co-Signed Loan

  • If the parent co-signs with the child on a loan, the parent is responsible for paying the debt. Even if the loan was for the child, as might be the case with private student loans, the parent assumed responsibility when co-signing and could be forced to pay the full amount if the child fails to. If the child misses payments on the loan, these missed payments will appear on the child's credit report and on the parent co-signer's credit report.

Credit Cards

  • If a child is an authorized user on the parent's credit card, the parent is responsible for all debt. Parents should not add their children as authorized users unless they trust their children to use the card responsibly. For credit cards held in the child's name, the parent only has legal responsibility for the debt if the parent co-signed on the credit card with the child. Children ages 18 through 20 need a co-signer or proof of sufficient income to get a credit card, so parent co-signing is fairly common. Parents should not co-sign on credit cards unless they are willing to pay any amount of debt that the child accumulates on the card.

Parental Choice

  • In cases in which parents are not legally responsible to pay for the debts of their children, they can still choose to offer assistance if they would like. If the child is about to fall behind in payments, the parent might choose to help so the child's credit score does not suffer. However, parents who intervene should not only offer money to children, but also offer financial advice so children can learn how to manage their own debts. This will prevent children from expecting their parents to bail them out.

Minors And Debt

  • Parents are responsible for paying for the care of their children when their children are younger the age of 18. This means that if, for example, a child requires hospitalization, the parent is fully responsible for any medical bill debt that results. The exception is if a minor gets his own credit card by lying about his age. In this case, neither the minor nor the parents are responsible for paying the debt, according to The Consumerist. The contract is not binding because the minor who signed it had was not old enough to enter a contractual agreement.

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