SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I would suggest to the OP that he sit down and explain to his daughter what would happen in the real world had she borrowed the same $7K on a credit card or bank personal loan, which I think is roughly as follows:
1. She would probably accumulate late fees and/or jacked interest rates.
2. She would eventually be contacted by the creditor.
3. If she contacted the creditor, she could probably work out a payment plan.
4. Any forgiven debt would generate taxable income.
5. The debt could be discharged in bankruptcy, but then she'd have a harder time borrowing money.
If I were the dad in this case, I think I would, as the creditor, wait and hope for #3 for a while, but if I ran out of patience I would probably contact her and say "Here is the balance, I can either discharge it and I won't lend to you for another 7 years, or we can set up a payment plan."
Also, I think overall it depends a lot on the kid. Some kids will take advantage of a parent's graciousness and other's will appreciate it. I think that would sway my decisions.
2Cor521
1. She would probably accumulate late fees and/or jacked interest rates.
2. She would eventually be contacted by the creditor.
3. If she contacted the creditor, she could probably work out a payment plan.
4. Any forgiven debt would generate taxable income.
5. The debt could be discharged in bankruptcy, but then she'd have a harder time borrowing money.
If I were the dad in this case, I think I would, as the creditor, wait and hope for #3 for a while, but if I ran out of patience I would probably contact her and say "Here is the balance, I can either discharge it and I won't lend to you for another 7 years, or we can set up a payment plan."
Also, I think overall it depends a lot on the kid. Some kids will take advantage of a parent's graciousness and other's will appreciate it. I think that would sway my decisions.
2Cor521