Am I Responsible For My Parents' Debt?

Jay’s parents have gotten quite, uh, spendy with their retirement income, and now they’ve got a lot of debt they can’t pay off. This has become Jay’s problem not because he’s a party to any of the debt, but because they’ve put him down as a reference and now bill collectors are harassing him.

He writes:

I have an issue I’m hoping you or the fellow readers can help me out with.

My parents are getting into there elderly years and have become very easy marks for salesmen, financing and buying all sorts of stuff they don’t want or need. I have tried to put a stop to it the best I can but nothing has worked, they are stubborn and wont listen to my pleas. My problem is now they have racked up debt greater then their social security can now pay. Being their son and one of the references they put on the credit applications, their creditors wont leave me alone. The worse offender is Conns (http://www.conns.com/) or who ever is there collection agency is.

They call my house, cell phone, office, and they have even started bothering my neighbors. I started out by politely telling them I have no control over my parents finances, and had they called me before they loaned the money I would have told them not to and to please stop contacting me. This has not helped, now the threats have started, and a few want me to pay. They are going to sue me, arrest me etc. I know their threats are B.S. but still the calls need to stop. This has got to be highly illegal, I’m not the borrower or even the co borrower. I’m simply their son they used as a reference.

I have started a log of all the activities but the numbers are blocked. I’m going to head down and file a police report but against who? I think I have 3-4 different ones bothering me but I can’t tell as they us different tactics and names all the time for all I know its the same company.

Any advice??

If actual collection agencies are calling you, then they’re breaking the law right from the beginning, because collection agencies aren’t allowed to call a debtor’s friends or family to attempt to collect the debt. You’ll want to get the name of each agency that calls, and tell each one not to call you again and that they’re in violation of the Fair Debt Collection Practices Act, and that you are going to report them to your state’s Attorney General’s office if they do it again.

CreditInfoCenter.com suggests you try to get a witness to listen in on the coversation, or if it’s legal in your state then record it. Here’s a list of what the law is on a state-by-state basis.

If retailers are calling you, ask them to remove you as a reference on the account. Make it clear that you have no connection to it and cannot help them. You may want to have your parents call and remove you from the account, or call on their behalf so that you can provide account information.

However, if on any of these accounts you were listed as a co-signer, then yes, you are responsible for the debt. It sucks, but that’s what co-signers are there for. You might want to ask for the documentation on each loan and review it to see what your role truly is, so that your credit isn’t hurt and you’re not surprised with a lawsuit later on.

You might also want to block unlisted numbers from going through to your phone. If you’ve confirmed that you’re not liable for any of the debt, there’s no reason you should ever need to talk to any of these collectors again.

And finally, if your parents can’t pay the debt they owe, you need to talk to them about bankruptcy. If they refuse to consider that option and refuse to otherwise deal with the debt, at least take comfort in knowing that their now bad credit should act as a warning sign to other lenders to stay away.

And tell them to stop using you as a reference on purchases and loans.

(Photo: Rev Dan Catt)