Is It Parents Or Children Doing The Driving Down The Road To Bankruptcy?

We know most parents would do anything and everything for their children, even after those children are grown. We know, too, that an alarming number of the elderly are sinking into debt after spending down their own retirement money helping struggling children keep a home or stave off bankruptcy (see Some Dads And Moms Driven Into Debt Helping Sons and Daughters).

More recently, though, I’m seeing that situation in reverse. I don’t remember this happening very often twenty-plus years ago when I was starting my practice as an Indiana bankruptcy attorney, but it’s happening now with increasing frequency. Now what I’m seeing are sons and daughters driven into debt helping parents! Perhaps it’s because people are living so much longer today. What I’m seeing, more and more, is adult children who have put their own finances in danger in order to support – or even bail out – their parents. Human behavior specialists have coined a name for this phenomenon, calling people trying to take care of themselves and their own families while at the same time tending to their parents’ needs The Sandwich Generation.

People struggling to manage their own finances at a time when everyday living costs have risen, who then take on the responsibility to help support parents, are especially vulnerable. Even if sons and daughters are willing to postpone their own retirements to help a needy parent, they become ever so much more vulnerable when hit by a job layoff, or an uninsured medical expense. The Sandwich Generation has a lot of responsibility and not a lot of “wiggle room”.

Having dealt with tens of thousands of different bankruptcy cases over a period of two and a half decades, I sometimes think I’ve heard it all. But I’m being reminded that in many ways things are different now, at least for an increasing number of people. The notion that our parents will be there to take care of us in the event that, despite our best efforts to make it on our own, we need a little financial help – well, that may or may not be realistic. Increasingly, adult clients are coming to me for help in filing bankruptcy after cutting into their own savings and even going into debt to support aging parents. Those parents, in turn, have often depleted what savings they had because of healthcare costs, or perhaps because their fixed income wasn’t enough to cover rising costs of living. And many clients who come to me for help staving off foreclosure feel they can’t downsize because their elderly parents are living with them and they don’t want to put those parents through the upheaval of a move.

One of the earliest blogs I posted, Money And Emotion Mixed In Bankruptcy, talked about the myths concerning bankruptcy filers being deadbeats. Children shouldering financial obligations – and often caregiving obligations as well – for elderly parents, why they look more like heroes to me!