A recent story highlighted by Fox Business offers a cautionary tale for parents who co-sign on their children’s credit card applications, even if that action took place decades ago.

The tale warns parents to be careful when making such decisions, lest they and their children find themselves in serious debt and considering filing for Chapter 7 bankruptcy protection.

According to this story that appeared in Fox Business, parents should be careful before co-signing on any credit card applications:

• The initial deal. More than two decades ago, Jennifer and her mother co-signed on a credit card while Jennifer was in college. Jennifer managed the account and her mother never received any information or bills related to the card for 22 years.
• The dilemma. Recently, Jennifer filed for bankruptcy protection with a $24,000 balance on her card. Jennifer claims that her credit card company is now harassing her mother for payments, despite the fact that it has not had her proper address for more than 20 years.
• The verdict. According to the columnist from Fox Business, Jennifer’s mother is, indeed, responsible for all of the debt. Despite the fact that she has not been associated with the account for more than two decades, her status as an original co-signer still makes her liable for her daughter’s credit card debt.

While co-signing on a child’s credit card is a generous way for parents to lend their good credit history to their children, parents must be careful about monitoring their children’s use of the cards.

In addition, after a certain point, parents should request that the child close their joint account after the child has enough credit history to take out a line of credit solely in his or her own name.

Of course, not every credit card experience is a positive one. Even the most responsible shoppers can find themselves in a debt crisis due to a financial emergency, medical debt, or a sudden job loss.

Fortunately, though, Chapter 7 bankruptcy offers a potentially fruitful way for people in debt to unload some or all of their credit card debt.

In order to file for Chapter 7 bankruptcy, filers must first pass a Chapter 7 means test, which is a simple measure of a person’s income relative to the average income in his or her state.

Briefly, the means test ensures that Chapter 7 is reserved for people with relatively limited assets. Rather than a barrier to entry, the means test keeps Chapter 7 filings limited to those who truly need it.

For more information on tackling your credit card debt woes, contact a Chapter 7 bankruptcy attorney today.

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