My dad borrowed money in my name

He took out loans for my education and spent it on bills.

Published February 20, 2009 11:31AM (EST)

Dear Cary,

I know the likelihood of me getting a response is next to zilch, but I really don't care as I have nowhere else to turn.

It goes like this. All my life I have been a straight-A student, whereas my older and younger brothers have not. I don't know whether it is because of guilt or because of my Catholic school upbringing, but I have been obsessed with doing well. I did so well, in fact, that after my high school graduation I was pleased to find that I had received a full scholarship to the nearest state university.

Full scholarship! I was excited, and so were my parents. But, of course, tuition rose a bit each year, and so did the extra payments. My parents, being proud of what I had accomplished, decided to take out loans on my behalf with the promise that they would pay it off. The total extra loans equaled around $8,500.

Well, I have since graduated, and to my dismay, I found that my dad actually took out more loans and used them to pay bills. I also got my loan statements back and have discovered that the total is actually now around $15,000. To make matters worse, my dad has lost his job, but he actually pays for my brothers to go to community college.

I don't know what to do. I feel bad for getting upset, because he lost his job. But at the same time, he was actually using the money to pay off bills when he had a good job! What should I do?

Hopefully you will respond to this message. Because I literally have no one else to speak to about this.

Confused in Arizona

Dear Confused,

I would advise you first to see a lawyer. There should be a free or low-cost law clinic in your town, or at your university, where you can get some basic advice about this. Bring any documents you have, and explain exactly what happened -- who signed what, who promised what to whom -- and then ask what your legal obligations are.

Only after you clearly understand your legal obligations can you make an informed decision about what to do.

By "exactly what happened," I mean things like this: Did you co-sign a loan? Did your dad take out a loan under false pretenses? Did you promise to pay him back? Did he lend you money? Did he give you money? Did he pay the school directly with the money?

Basically, the common-sense situation seems to be this: If your parents took out loans, then they owe the money to whomever lent it to them. If your parents gave you some of this money that they borrowed, then it was a gift to you and you don't have to pay it back. If your parents lent you some of this money that they borrowed, then you have to pay it back to your parents, but not to the institution they borrowed it from. If both you and your parents signed loan documents, then you may be each and severally responsible for the loan. So you have to clarify what happened and who owes what. That's why I would see a lawyer.

But that's just the legal situation. In families, much of what we owe goes unsaid. We are often understood to have obligations that are not on paper, or not explicitly stated. That makes money issues especially difficult to sort out. Sometimes, with money, what we expect is buried so deeply that we cannot even say it; we cannot even say what we want. We expect to be repaid but we do not say it. We become angry at a family member for not doing what we want, even though we can scarcely say it. Or we say to ourselves, "She owes us," or "It's her duty," and so we take someone's money that doesn't belong to us, or we take money earmarked for one purpose and use it for another. So things get tricky.

So this is a potentially messy situation. That's why I suggest that before you do anything you get a clear idea of what your legal obligations are. Then take some time to think it through before responding.

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By Cary Tennis

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