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Study examines how parental debt can influence behavior of children

It goes without saying that one of the major worries for most Americans is -- and will likely always be -- managing debt. This is especially true, however, for those who have families, as they not only have to ensure that their bills are paid on time, but also ensure that their children are provided for on an already limited budget.

Indeed, the financial stress can sometimes be so great that it results in verbal disagreements and palpable tension in the household, something that affects not just the relationship between parents, but the behavior of their children as well.

By way of illustration, consider a recently published study by researchers at the University of Wisconsin examining the impact of household debt on the emotional wellbeing of children.

The researchers centered their examination on a data pool consisting of 9,011 children and their mothers. Here, they conducted interviews with these mothers every two years to learn more about the behavior of their children, and divided their household debt into four categories, including education, auto, home and unsecured (i.e., medical bills, credit cards, etc.).  

They discovered that behavioral issues among children generally increased as the household accumulated more debt. However, they also determined that this phenomenon was largely limited to unsecured debt, meaning higher levels of debt attributable to things like home mortgages and student loans resulted in fewer behavioral issues among children.

The authors theorized that the results might be attributable to the fact that things like education- and home-related debt is really more of an investment and therefore less stressful.

“It makes sense that taking on debt for specific investments can be beneficial -- for example, taking on student loans to go to college or a mortgage to buy a home may lead to better social and economic outcomes, whereas taking on unsecured debt, such as credit card debt or payday loans, that is not tied to such investments may not," said the lead author of the study.

While the authors indicated that further research was needed to clarify the results, experts unaffiliated with the study have suggested that unsecured debt is typically more stressful given that collection efforts can rapidly become demanding and overwhelming. As such, they suggest parents do their best not to address this emotionally charged issue around their children.

It's important for parents who find themselves confronted with unmanageable levels of unsecured debt to understand that they do have options for alleviating some of this stress and securing a fresh start, including Chapter 7 bankruptcy. To learn more, consider speaking with an experienced legal professional.   

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