skipping the country owing money to the bank

[frazzledfozzle]

I'm in desperate need of advice from someone who knows about these things.

Here's my problem.

Son 20yrs old takes out a personal loan of $5000 when he turned 18.

He has since left New Zealand owing $5600 on that loan because of non payment and penalty interest.
The bank have handed it over to a debt collecting agency.
He received notification from them that if this amount isn't paid in 7 days proceedings will be taken against him.

He has no assets so I dont know what they can do to get their money back.

My dilemma is as his parent should I stump up and pay off the loan for him, I've been strict with myself not to intervene because he seems to think that if he ignores a problem it will go away I have talked to him about it time and time again to no avail.

If I dont make payment for him how seriously will this affect his future?

Once the debt has been handed to debt collectors can he arrange with them to pay it off weekly or has he used up all his chances of doing that?

I want my son to grow up and be responsible for his actions but I dont want this to severely affect his life.

Please take the time to give me some advice.

[Davo36]

I think you'll harm his future more by paying it off for him.

At 20, he's a man, not a boy. Time for him to learn to be one.

Tough but fair.

[frazzledfozzle]

Davo I know in my head you are right it's time he stood up and acted like a man but in my heart he's my boy and I want to protect him

I wish I could get the emotion out of it because I know you are probably right

[frazzledfozzle]

what makes me so mad and frustrated is that he can afford to pay it himself he's on a good wage he could have been paying it back to the bank all this time but he has just let it ride

[jedimaster]

Theoretically the bank could make him bankrupt for the $5,600, although given the amount I am not sure if they would bother doing so (as the cost of making him bankrupt would be more than the amount owed).

The other scenario (I guess best case) would be that he gets black marks on his credit rating.

Either way if you do nothing, at best it is likely to impair his ability to borrow again in NZ in the future.

[eri]

better he learn this lesson now

in his 20's over $5000

than

in his 30's over $50,000

or

in his 40's over $500,000

but be prepared for the debt collector to turn up on your doorstep 1 day

asking you to make it all good

so they can collect their 50%

which is what they mean by "good"

[frazzledfozzle]

Eri if the debt collector comes calling here we aren't going to be held liable for his debt are we?

I dont know why the bank even lent him the money in the first place his savings record was rubbish, it seemed as soon as he was old enough to borrow money they were happy to give it too him, not that that excuses his behaviour in any way.

[Keys]

Davo I know in my head you are right it's time he stood up and acted like a man

Then let him experience the consequences of his decisions.

[eri]

unless he has nominated you as guarantors

i don't think the debt collectors can do more than ask

but for years

they will knock on the door

and call, saying they are old school friends trying to get in contact with their old mate

it's just not worth it.....

how many kids do you have?

i know of families where the parents have paid the debt of 1 child

and then given the others equivalent cash to balance

that let's the black sheep know that's it's not just $5000 it's costing mum and dad to bail them out

but $15,000, if there are 3 kids...

easy credit

the crack cocaine of this generation

[frazzledfozzle]

3 kids but fortunately just the one thats "challenging"

No we didn't garauntee his loan there's no way we would have done that.

He spent the money on a camera a PS3 and other rubbish all of it gone.

one day he will need to come home whether it's for a marriage or a funeral then he wont be able to get away from it I imagine they will have his passport flagged and he will be toast!

[VirtualT]

3 kids but fortunately just the one thats "challenging"

No we didn't garauntee his loan there's no way we would have done that.

He spent the money on a camera a PS3 and other rubbish all of it gone.

one day he will need to come home whether it's for a marriage or a funeral then he wont be able to get away from it I imagine they will have his passport flagged and he will be toast!

I doubt he will get arrested at the airport for defaulting on a $5k loan LOL, but IMO you should do nothing and let him suffer the consequences of his own actions, I have payed out all the fines for my boy when he was 21 as a present and to give him a fresh start, well he didn't appreciate it and has now racked more fines up, what a waste of time.

BTW if he waits out the statute of limitations out he won't have to pay it anyway, you could say his credit record might be a different story,.. but I know of someone who skipped to oz owing $7K on a credit card, then moved back to NZ 15 odd years later and straight away secured a home loan for a lifestyle block.

[Keys]

Have just heard from Irini that immigration flag passports once the debt gets to $10k. That was the system 20 years ago and she has no reason to suspect that it has changed.

[eri]

friend gave his son a car

son sold car for about 20% of it's value to buy a ticket to fly to europe

came home with a fair few debts

and asked dad to buy him another car....

kids will push the boundaries

until they are pushed back

some learn quickly

some take more time

it's often the youngest

that takes the longest

[Keys]

friend gave his son a car

.......................................

and asked dad to buy him another car....

And? (MAMC)

[frazzledfozzle]

Thanks everyone so much for your advice.
I will let him face up to his actions even though I'm finding it really hard.

As a parent you always want the best for your kids and it makes me feel sick that he is getting into financial trouble.

I guess in some ways I need to take some responsibility for his irresponsibility as like VirtualT I have paid his fines in the past and just like Virtual T he racked up more so maybe I need to wake up to myself also