How Do Your Parents’ Debts Affect Your Finances?
The personal finance industry is fond of reminding us that wealthy people have a different attitude toward money than their counterparts with fewer resources, and this manifests itself in the different financial behavior of the members of each income bracket. Being knowledgeable about the long-term consequences of your financial decisions is admirable, regardless of your income level, but money is more than just a state of mind. To increase your wealth and your access to credit, you have to do more than just think like a rich person, pace Rich Dad Poor Dad. How much money you start out with affects your financial strategy in many ways, from determining how much more money you decide you need to achieve your goals to affecting how easy it is to begin establishing a credit history early in life. It is abundantly clear to the current generation of young adults in the United States that everyone they know, including their parents, has enough debt to stress them out. The bad news is that debt is ubiquitous, but the good news is that you cannot inherit debt, at least not in the strictest sense of the terms. If your family has been living with debt for generations, and it is stressing you out, contact a Miami debt lawyer.
Creditworthiness Easily Passes From One Generation to the Next
The lower your parents’ debt to income ratio when you are a child, the easier it is to build your creditworthiness when you are a young adult. If your parents could afford a college savings account for you, then you will graduate with much less student debt than your classmates whose education was funded entirely by scholarships, financial aid, and loans. For many reasons, your path to homeownership, the grand prize of creditworthiness, is much easier if your parents own the house you grew up in. If you don’t have these resources, the path to acquiring valuable assets, which usually requires paying for them at least partially on credit, is much harder.
Can You Inherit Debts From Your Deceased Parents?
The good news is that your parents’ debts cannot haunt you from beyond the grave. When a person dies, creditors to whom the decedent owed money have only a few weeks to seek repayment of outstanding debts from the decedent’s estate. The bad news is that, the more the estate pays toward debt settlement, the less there is for the decedent’s family to inherit; some people inherit nothing for this very reason. Once the estate’s money is gone, though, neither the personal representative nor the heirs are responsible for paying an outstanding balance to the creditors.
If you live surrounded by debt, debt relief options are available. Miami-Dade County also offers programs to enable people who have never owned a home before to afford homeownership.
Work With a Debt Lawyer About Breaking Out of Generational Indebtedness
A South Florida debt lawyer can help you get out of debt when you have few financial resources with which to do it. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.