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Bankruptcy Clients Of The Month: Parents In Financial Trouble

By Susanne Robicsek, North Carolina Bankruptcy Attorn

Bankruptcy clients of the month:  Parents.  Specifically, parents with adult kids that need monetary help.   

I seem to be seeing a lot more people whose adult children have moved in with them.   As the economy grows worse, children seem to be moving home in greater numbers.  The parents I am seeing are seniors living on fixed incomes, or people who are earning just barely enough money to pay for their own expenses.  The added costs of the additional mouths to feed and covering their other needs are too much for the parents’ budgets.  I see clients who have tapped into their home equity, taken out loans or run up credit cards trying to cover everyone’s needs.  Soon they are unable to pay their bills, are drowning in debt, on the verge of loosing their houses/cars.  Bankruptcy is often the only option at this point.

Many of these children are moving home, often bringing spouses and their own kids.  My clients are not guilty of overspending on luxuries, but they may be guilty of too much love. 

Sometimes Chapter 7 bankruptcy can help wipe out enough debt that the household can make ends meet.  A Chapter 13 may be needed to help stop a foreclosure and save the house as well as wipe out unsecured debts.  

Ultimately, what needs to be addressed is the clients’ budget, but not just their budget alone.  The whole family needs to work the additional household member’s incomes, needs and expenses into the budget and look at what they can contribute. 

It surprises me when I see clients who are buckling under the financial strain, working hard long into retirement age, or working two jobs to support everyone, and I find out that there are adults in the house that aren’t even looking for work or are unwilling to take jobs because they don’t pay enough money!

Some of the children work, but don’t contribute to the household overhead because all the money they get “go to their own bills.”  Many are unemployed, because they just can’t find work or they may have health issues or disabilities.  Often, they are just not willing to work, or at least not at the jobs being offered. 

Often, it isn’t the parent’s who come see me that needed to adjust their budget, but the kids who are able to balance their own budgets and pay their bills because their parents were going broke covering their living expenses!  Mahy times the children should have spoken to a bankruptcy lawyer instead of relying on their parent’s income (or credit) to fix their finances.

To balance a family’s budget, you have to look at ALL the members of the family and you may need to pool resources.  You have to understand where all the money goes.  Solving one person’s problems should not push another into crisis, and that is what is happening to many parents as children are seeking help for their own financial problems. 

See also: 

My Article on The importance of a balanced family budget

My Article on How to save money in your monthly budget

Article Spending and Money Problem? Five Steps to Gain Control by Eugen Melchionne CT bankruptcy lawyer 

Article: 10 Steps to Financial Recovery By Karen Oakes OR bankruptcy attorney

Article:  Do you suffer from disappearing cash syndrome? by Jonathan Ginsberg, Atlanta bankruptcy attorney

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Full post as published by Credit Law Network on February 17, 2011 (boomark / email).