So how do you get your child out of debt? Well the first and best choice, according to your child, would be to just give them the money to pay off the bills. But is that really the best option? I do not think so. I have been working with people young and old, lender and borrower, and the outcomes are seldom good.

Getting Started
First let’s start with the person getting into debt and pretend that it is your child just starting out on their own. They have left the nest and all you worries are over. But wait a moment, bills are starting to come to you and you can’t reach your child because the phone has been turned off. What is going on? My first guess would be lack of planning and understanding about the real world of bills. More to the point, there was no planning, rather just a desire to break out on their own. If you do not prepare your child for the real world of bills you could find them right back on your doorstep; with baggage!

Get to the Source
Let’s look at the real problem. The lack of planning and understanding about how the real world deals with bills is the first stop. Without getting too detailed, you should have gone over the plan with your child and talk about the issues that are bound to come up before they move out. Rent, utilities, deposits, credit checks, roommates and food are just a few of the potential bomb shells that you child will have to deal with. What was the plan?

Roomates from Hell!
If they have rent they will probably have roommates to help share in the expense. Think back to all the bad experience you had or heard about roommates. And let’s focus on the financial issues and not being locked out while your roommate entertained a guest all night while you slept in the car. Or they forgot to replace the toilet paper. The rent is due and they don’t have their part of the rent, and ask you to advance them the money.

Then they want to move out because they can’t catch up and leave you with the entire bill. Did they have a lease? Did you have a co signer? Can the landlord come after them for the money? Can it affect your credit and ability to rent in the future? You bet! Laws vary from state to state but the landlord is most likely going to come after you for the lost rent. Even if you move out you still have a lease and are responsible for the rent for the entire lease period. And just paying your ½ might not be good enough. The landlord will want all the money and will get it from which ever person he finds first.

They put the utilities in your name and skip out when thinks get tough. I have helped hundreds of people setup payment plans to repay debts that were rightfully their old roommates. But after the breakup there is little desire or ability on the other parties part to do the right thing. Years pass and you get a better job and want to marry and buy a house only to find you can’t turn on the utilities until you pay that old utility bill from years ago. How embarrassing! But you have little choice as you want to move into your new house and the utility company is not going to turn it on until you pay first.

Fail to Plan and Plan to Fail
So many people come in to my office with these problems everyday. I hear over and over again that they did not plan for this to happen. The truth is they did not plan at all. Would you pay poker for money if you did not know the rules? Of course not, but you will sign contract and make debts without understanding what your are liable for.

And you will get taken advantage of because you lack the experience and insight to deal with the situation. If you child comes to you in debt do not give them the money without fixing the problem. Talk to them and get a game plan together on how expenses work and simple budgeting principals. This is a great time as you have their attention and most of all they really need you.

In the end most parents bail out their children by paying the bill. But it can be a great learning experience and a time to work together on a plan. Not only a plan to get them out of trouble, but to repay the parent for bailing them out in the first place. I keep going back to the plan because it is the foundation for achieving your goals.

I work with individuals and families everyday on this very subject. And planning is the key to success. And it needs to be done first.

Greg McTaggart, Certified Credit Counselor with 22 years experience, licensed by AFCPE, Director of Christian Credit One and is an expert in and budget and credit counseling. Having the combined experience as a licensed as a Real-estate salesman, Mortgage Broker, Real-estate Broker, notary, Ace Member of the Cincinnati Credit Executives, Mortgage Assistance Counselor and Spokes person of the Radio talk show “The Money Mentor"; Greg McTaggart is qualified to help you. www.settlemydebt.com