As parents, we all love our children and want the best for them. One goal as a parent is to assist in their growth as a person, including developing the skills necessary to allow them to become financially self-sufficient. This development in turn allows us to retire without worries about our child’s financial well-being.
Unfortunately, a number of economic and environmental influences have made this goal more difficult to achieve. Such factors as the rising cost of post-secondary education have made it difficult for many people to obtain the education required to secure a well-paying job. And even with a good education, all too often in today’s difficult job market, young people are unable to find a well paying, secure job. As a result, children will often fall back on their financial safety net for support: their parents.
The result too often is that parents – out of love and a sense of obligation – end up financially supporting their children much later in life then anticipated. Unfortunately, in many cases, the parents themselves are not financially secure enough to continue this support without the use of their own credit. This may include additional use of credit cards and personal lines of credit. In some cases, it may entail the refinancing of the family home.
The longer the support is required, the more perilous can become the parents own financial stability.
We meet seniors to frequently who are at a stage in their lives where they should be focusing on their retirement, and enjoying the time of leisure they have earned. Instead, they are stressed and losing sleep due to the steady stream of collection calls they are receiving. Or worse, the threat of losing their home due to missed mortgage payments.
As much as we all love our children and find it painful to watch them suffer at any level, there may come a time in your life where you need to put your financial needs ahead of your child’s. Support should be provided at a rate that is comfortable and affordable to the parent.
Identifying this rate can be difficult, but it should never entail steadily rising credit card, and line of credit balances. If you need to refinance your home to support your child, you may be going too far with your support. Co-signing a loan or a credit card for a child can also be a dangerous endeavor.
Notwithstanding the risk, we understand severing the support line can be very difficult. If you find yourself in a position where debt is becoming overwhelming, where minimum credit card payments and monthly mortgage payments are difficult to meet, it may be time to speak to a trained professional at A. Farber and Partners. We are Licensed Insolvency Trustees, who can review your situation and your childrens’ and discuss all options available to you.
Bankruptcy is not the only option. In fact, in most situations we will be able to assist you in developing a Court approved settlement arrangement with your creditors. This is known as a Consumer Proposal. A successful Consumer Proposal can allow you to keep your home and eliminate the stress associated with the debt.
It can also help you and your childeren to re-establish their credit rating at a faster pace, which might very well help your children to become financially self-sufficient.
Contact us for a free, no-obligation consultation, in which we review and discuss all the options available to you and your children, to get out of debt and rebuild your financial situation.