Many California families are fortunate enough to be in a position to offer financial help to their children and grandchildren. This can be both a blessing and a curse, as helping loved ones can place a financial burden on the person providing that assistance. For families that eventually need to seek personal bankruptcy protection, it is important to embrace the concept of financial reciprocity.
Family members help their loved ones in so many ways. Whether it is assisting with college tuition, buying that first car when a grandchild gets a license or helping an adult child with the down payment for a home, most of these expenses are an act of love. Often, these funds are spent at a time when the financial outlay is easily accomplished. Later in life, however, there may be the need for those kindnesses to be returned.
For those who are facing bankruptcy, it is important to sit down and discuss the matter with loved ones. Often, family members are now in a position to repay earlier kindnesses and can lighten one's financial burden. Having a family meeting or a series of personal conversations on the matter will at least allow everyone in the family to be aware of the circumstances and to offer help if possible.
For some in California, family members will not be able to provide meaningful financial assistance. In such cases, filing for personal bankruptcy may offer the best available option. Doing so can help eliminate many types of consumer debt and can give individuals a fresh financial start. Moving forward, many people will reevaluate how familial generosity fits into their overall financial planning.
Source: tennessean.com, "Financial generosity for family is a two-way street", Scott Burns, Nov. 13, 2015