A parent is supposed to be the one person that you can trust with anything, however, there are more and more cases involves a parent abusing your finances than what most people realize. When this occurs, most people are unsure of how to handle this. After all, it is usually unexpected and comes as a huge shock to that person.
How Parents May Abuse a Child’s Finances
There are several ways in which a parent abusing your finances can happen. Below are the most common:
- Opened a credit card in their child’s name then proceed to run up the balance and not pay this off
- Took out a loan in the name of the child, then did not repay this loan
- Utilizing the child’s information as a way to obtain a mortgage
- Opened consumer goods, like a cell phone or the like, then never paid the bill resulting in this being turned over to a collection company
- Co-signed on a loan with the child for a greater amount, then spent the difference
How to Deal with an Abuse of your Finances
Once you realize that a parent abusing your finances has occurred, there are several steps that you are going to want to follow to ensure that you are making your way back to financial freedom. These steps will help you to navigate what will be a long ordeal:
Check your credit report
You will want to check your credit report from all three bureaus to see just how bad the situation is with a parent abusing your finances. You are going to want to check for all the lines of credit that have been opened in your name and whether you actually opened these or not. You are entitled to one free credit report per year, you will want to utilize this now.
Put a credit freeze on yourself
A credit freeze is going to make it almost impossible to open any line of credits in your name, even if you are the one who is doing this. It has to be reported to all three credit agencies. If your parent were to try to open a line of credit, the lender would be unable to access your credit report, resulting in the parent no longer being able to use your credit. The good news is that if you have filed a police report against the parent abusing your finances, or the credit bureaus realize that you are a victim of identity theft, credit freezing is often free. Otherwise, there may be a charge to do this. IN order to lift the freeze, you will have an identification number and password that must be used to lift this.
Try talking with your parent
This may not always be an option, as many children find that it may be an estranged parent who has done this to their finances. However, if you are close to your parents, open up a line of communication. You and your parents need to discuss what needs to be done in order to get your credit rating back up to where it should be before they decided to use your credit as their own. This may involve turning the parent into authorities, which for many is too extreme of an action. Other children are able to work out a payment plan with the parents in which they reimburse them for the loans, credit cards and the like that were used for racking up the balances.
This is where you either:
- Start paying off your debt on your own or with the help of the parent who racked up this debt
- File a police report against the parent who will ultimately show that your identity was stolen
- Tell the credit companies what has happened
You do have options in dealing with the parent abusing your finances. However, keep in mind that if you tell the lender or file a police report, this could result in the parent going to jail. Credit companies can legally file a case against the parent who did this, as it is against the law for anyone to utilize someone else’s personal information for opening a line of credit. On the other hand, you may decide to pay off the debt, but hopefully your parent will assist in doing this. This is where having an open line of communication is going to work the best, so that you all can be on the same page with how to handle this.
When a child discover a parent abusing your finances, it can be devastating, and for good reason. However, there are options to help you get your credit back to where it should be and to ensure that this never happens again. It may take a while to get this completed, but in the end, your credit will be better for it.