Adult Children Co-sign Loans for Parents

Adult children increasingly co-sign for parents' loans

Financial roles reverse due to rising debts, falling retirement funds

By Michelle Crouch

It's almost an American tradition: Kids in their 20s without a credit history have long turned to their parents to co-sign for them, whether it's for a first credit card, a car or an apartment lease. Now the credit crisis is turning that tradition on its head.

Financial advisers, credit counselors and lenders across the country say they've seen a surge in middle-aged parents who have damaged their credit asking their adult children -- usually in their late 20s or early 30s -- to co-sign loans and leases for them.

"I'm seeing this a lot more now than I did two or three years ago," says Laurie Giles, an elder life planning attorney in Shelton, Conn., and author of the "What Now?" book series. "A lot of times, it's parents who had stable jobs for 20 or 30 years who got used to living on credit, then they're suddenly downsized and they don't have strong savings built up, or their savings went down with the market. And their house isn't worth what they thought."

http://www.creditcards.com/credit-card-news/children-cosign-for-parents-1273.php