Dear Wendy
Dear Wendy

“Should I Sue My Parents?”

After I received the following letter, I reached out again to prolific commenter, “Addie Pray,” our resident legal expert who gave some great law-related advice last month. She was nice enough to extend some of her superstar legal expertise again to answer the following letter:

My life has been turned upside down and I feel incapable of fixing it. When I turned 18, my parents put their business in my name without my full understanding. I was instructed to sign a few documents. Being young and trusting my parents, I didn’t question it. Shortly afterwards, my Mom stopped paying business taxes. A few years later, I turned 21 and attempted to rent my first apartment. Not only did I discover I was a ‘business owner’ on paper but I had a major tax problem as well. When I confronted my mom, she claimed it wasn’t done maliciously. She acknowledged making bad decisions but also said the business was doing well at the time and she assumed they could ‘bail me out’ if necessary.

Well, needless to say the economy fell and they lost nearly everything, including their house.

Now, at 24 years old, I’m frustrated, anxious, and embarrassed because I’m stuck with an enormous tax debt that isn’t mine with no foreseeable way out. I can’t afford to hire a lawyer or bring myself to turn in my parents. Among other things, I’ve also been disqualified for financial aide because of this, which forced me to quit school suddenly without explanation.

I feel like no one can relate to my situation which makes me feel incredibly alone. How can I rebuild my life? — Reluctant Business Owner


Wow, your parents – pardon my French, but quels dicks! The level of premeditation that went into screwing you over is sickening. I don’t think you fully comprehend that.

Sure, you can blame the economy; your parents did not anticipate that curve ball. But they schemed and plotted against you every step of the way! They waited until you turned of legal age. Preying on a child’s love and trust, they tricked you into assuming ownership of the business, but just the liabilities so it seems. (Did you receive any of the profits you were entitled to as the owner? If taxes were owed, I assume there were profits at one point.) The coup d’etat? They chose not to pay taxes shortly after dumping liability onto your unsuspecting lap. (How convenient for them!) They continued to lie to you every day about your role in the business, as your liabilities grew. Were they ever going to tell you? Do you think these events
happened by chance or with good intentions? How do your parents sleep at night?!

I’m livid just thinking about this. I am glad you didn’t ask how to rebuild your relationship with your parents; I would have said, “Don’t bother.”

You asked how to rebuild your life, and I am here to give you some non-legal advice to go get legal advice. Unfortunately, you can’t rebuild your life without hiring some good lawyers. (“Oxymoron!” There, I said it first. Touchée!) I know money is tight, but this is one of those necessary expenses like rent, electricity, and … cable.

If you had a chest pain, you’d go see a doctor, right? Well, your legal pains will not go away if you don’t go see a lawyer. The IRS will not forget about the taxes you owe, and Fannie Mae will never help you.

Lawyers are trained to “issue spot,” which means identify legal issues based on the facts presented. When I read your letter, a few ideas popped into my head that I’d be interested in looking into if I were you:

• Suing your parents to set aside the transfer of ownership based on fraud and to put the ownership back in the rightful owners’ names (i.e., your parents);
• Filing for bankruptcy individually and/or the business (I wonder if there are other creditors out there besides the IRS?);
• Dealing with the IRS to see if it will consider waiving the penalties and late fees that you are likely incurring as we speak;
• Reviewing the business’s corporate documents (e.g., the operating agreement if the business is an LLC or the articles of incorporation if it’s a corporation), which should detail how the profits are distributed and may provide that the money was to be distributed to members to pay taxes;
• Suing your parents for such profits earmarked for taxes; and/or
• Suing your parents for damages that you’ve incurred to date as a result of their fraudulent conduct (and possibly your attorney fees should you prevail).

To learn about these possibilities and more, please hire an attorney – a bankruptcy lawyer, a tax lawyer, and/or a civil litigator well versed in corporate law.

I understand your hesitation to “turn in” your parents as you say, though less so considering the harm they’ve caused you. Remember, we are not talking about locking them up in jail or kicking them to the curb while you score an undeserved windfall. This is about reversing the legal nightmare – the best you can – that your parents created, and trying to make yourself whole again.

[Disclaimer: The information contained in this Website does not constitute legal advice, nor does it create an attorney-client relationship. You should contact your attorney to obtain advice with respect to your particular issues.]

*If you have a relationship/dating question I can help answer, send me your letters at wendy@dearwendy.com and be sure to follow me on Twitter.

85 comments… add one
  • Budj

    Budj January 17, 2012, 3:07 pm

    This situation is pretty disgusting to me. I hope it works out for you, LW…you owe it to yourself to set the story straight. Your parents made their beds and slipped you into the sheets…how can there not be malicious intent?

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    • Budj

      Budj January 17, 2012, 3:09 pm

      With the terrible credit you have….you and any future spouses purchasing power in the future will be affected. This will follow you indefinitely…straighten it out.

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  • avatar

    amber January 17, 2012, 3:11 pm

    I get that your Mom wants you to think it wasn’t malicious, but you were their kid and they took advantage of you. No way around that. I also agree with Addie that you really need to hire an attorney. I don’t really know about how paying an attorney works but perhaps there is one out there that is willing to help you with a payment plan or something along those lines? Are you still living with your parents or are you on your own now? If you’re living with them still I would also suggest finding a way, perhaps with roommates, to move out. My husband dealt with this but on a smaller scale. His Mom took credit cards out in his name and then maxed them out and never paid the bills. I wasn’t with him when he went through this but he said it was hard to get things straightened out, but it was worth it in the end. I’m going to guess your parents are going to be pretty pissed after they find out what you’re deciding to do. I hope that you can reach out to a friend and explain to them what’s going on before that happens. You will definitely need people to rely on for moral support! I hope things work out for you!

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    • avatar

      cporoski January 17, 2012, 4:51 pm

      I saw a news story that said family members are the most likely people to steal your identity. so sad.

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    • avatar

      SherBear January 18, 2012, 12:13 pm

      When I sued a former employer my attorney waited until the settlement and then took out their fee. They weren’t one of the only pay if you win law firms, but it was pretty obvious I would get a settlement so they were fine with a deferred payment.

      Your story makes myself and probably everyone else sick to their stomach – I’m sure there are compassionate attorneys out there who would be more than willing to help you out for a reduced fee/deferred payment or any other arrangement you can work out.

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  • avatar

    lets_be_honest January 17, 2012, 3:18 pm

    Great advice, Addie!
    LW-Follow it.

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  • avatar

    Taylor January 17, 2012, 3:20 pm

    Well said AP! LW – their bad decisions don’t have to be on you. Get legal help!

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  • avatar

    ChemE January 17, 2012, 3:22 pm

    Wow… just wow.
    I will never understand how parents can take advantage of their kids. It’s so infuriating.
    When you talked to your mom did she indicate that they would be paying any of that owed money back? That they’d help “bail you out” as they put it??

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    • avatar

      cporoski January 18, 2012, 8:55 am

      Right, because if those taxes aren’t paid they can garnish her wages. Have they said they will do anything to fix it?

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  • avatar

    ReginaRey January 17, 2012, 3:24 pm

    Great advice, Addie.

    As Budj said, your parent’s behavior disgusts me. A parent should NEVER take advantage of a child in that way, even if that child was legally an adult. I think a parent’s role is first and foremost, no matter your child’s age, to help protect them from being taken advantage of. For them to do that to you? It’s unthinkable.

    Unfortunately, LW, this problem will only get worse if you don’t do something about it. You need the help of a lawyer. I hope you can work something out.

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  • avatar

    oppositeofzen January 17, 2012, 3:26 pm

    Follow Addie’s advice. While your parents could not have forseen the recession, they still made you the legal owner of their business and have almost ruined your financially. It will be hard, but you need to set things right so you can go on with your life. Good luck!

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  • avatar

    KarenWalker January 17, 2012, 3:30 pm

    Oh honey. Your parents screwed you over. Maybe they didn’t think of it as screwing you over and found ways to rationalize or justify their actions, but that’s exactly what they did.

    You need legal help, not to get revenge on your parents, but to protect yourself. There are major implications here that could severely effect your life and your livelihood, as you’re already seeing, what with having to drop out of school. Things aren’t going to get better unless you take action. Maybe you can even find a lawyer who will take you case pro bono.

    Based on your letter, it seems like you love your parents and aren’t looking to cut them out of your life. With that in mind, if your relationship with your parents is good right now and you’re trying to keep it that way, talk to them. Make sure they know exactly how their decisions and actions have impacted you. Let them know that you love them and only want to get your life back on track and that’s why you’re getting legal help.

    Of course, you don’t owe them that, or anything really, so do not feel obligated to talk to them. In fact, maybe your lawyer might advise against it (I don’t know, I’m not a lawyer).

    P.S. You only mention your mom in your letter. Where is your dad in all of this?
    P.P.S. Good luck!

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    • avatar

      slamy January 17, 2012, 4:25 pm

      Just a note, a lot of cities have volunteer attorney programs who can help you for free if your income is low enough – and if your income isn’t low enough, they can point you in the right direction at least.

      Here in Dallas it is called the “Dallas Volunteer Attorney Program” so maybe if you look that up with your city name you can find something. Good luck. What a nightmare.

      ps: i’m not an attorney. i just volunteer at the DVAP to do clerical work because it makes my attorney boss happy.

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    • avatar

      mcminnem January 17, 2012, 5:04 pm

      I was going to suggest looking for a pro bono lawyer. Also, you can ask for legal advice without having to actually hire someone, if you want to do that first – most attorneys, when you first go to them and describe your situation, will give you some basic advice in the form of “here’s the legal action I suggest you take, and what I’ll do if you hire me”; as a sort of estimate on the work that needs to be done and what the cost will be. You can learn a lot just while shopping for a lawyer!

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  • JK

    JK January 17, 2012, 3:35 pm

    Great advice.
    I really have no idea how parents can do this type of stuff to their kids. ANd they don´t even have the excuse of the economy turning to crap, since the mother stopped paying taxes as soon as they conveniently turned the business over.

    LW, please do whatever you have to to fix this!!!!

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  • avatar

    Guy Friday January 17, 2012, 3:35 pm

    100% agree with Addie. Get a lawyer (ideally a firm that does all of this) specializing in bankruptcy, tax, and ESPECIALLY contract law. It may or may not be coercion or duress, but it’s almost certainly a material misrepresentation, which may well void the contract and put it back in their name. No matter what though, this is going to be a protracted legal battle, and you’re going to want competent representation. There are often non-profits that handle these kinds of things for free or for a very low rate; I’d look into those if you can.

    Also, I know declaring bankruptcy seems like a scary thing, but there are a lot of different types of bankruptcies, and there are some that won’t actually screw your credit report over as badly as you might think. You should definitely ask about that from a bankruptcy lawyer.

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    • Budj

      Budj January 17, 2012, 3:48 pm

      Adding fuel to your bankruptcy option – Donald Trump filed for bankruptcy more than once I believe…and he seems to be doing ok.

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      • avatar

        savannah January 17, 2012, 3:52 pm

        Also because you are young, and have time to restore your credit I 3rd looking into bankruptcy.

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    • Will.i.am

      Will.i.am January 17, 2012, 3:54 pm

      That’s not true. A person has three options. Chapter 7, Chapter 13, and debt restructure. I can’t tell you from experience, but I work in banking, and they are all bad. Chapter 13 and debt restructure aren’t as bad as Chapter 7, but they all wreck your credit. Chapter 7 deems you can’t pay any of your debt, and you forfeit responsibility. That dings your credit for 7 yeaars. In the grand scheme of things, 7 years is a very long time. If you were 25 when you filed, you would be paying very high interest till you were 32 and possibly even longer.

      Next is Chapter 13. It’s more of my spending habits were terrible, and I don’t want to forfeit my debt, but I want to make my payments more inline with what I can afford. Your bankruptcy trustee sets up a payment plan with all your creditors. Then you pay your trustee a monthly payment and they will disperse it to all the creditors. You do this for 5 years and whatever is left is deemed, abandoned, and the debt is then discharged. That still hurts your credit and you won’t be approved for any reasonable interest rates when looking for a car or entry level credit card.

      Next is debt consolidation. This works much like Chapter 13 bankruptcy, but what most people don’t understand, is this still looks like a bankruptcy on your credit report, even though you didn’t file a Chapter 13 or Chapter 7. Your credit score is still affected and is more online with the same payment structure as a Chapter 13.

      Hope this helps to shine some light on what your options are.

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      • Will.i.am

        Will.i.am January 17, 2012, 3:56 pm

        Now new regulations are in force to where you can’t even forfeit debt filing a Chapter 7 bankruptcy, so you will still have to pay back a portion of the debt you are wanting to abandon. I’m unfamiliar on the time structure if they have increased the payback period to 10 years or not.

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      • avatar

        Guy Friday January 17, 2012, 4:06 pm

        I appreciate where you’re coming from, but 5 years on a Chapter 13 is, in my opinion, not very long at all, especially if there’s a severe amount of debt. And, honestly, it’s definitely a last-chance scenario here, since I believe that there are a number of legal avenues the LW can take that would remove this debt from her ledger, so to speak, without needing to declare bankruptcy. My point was only that there’s this perception of bankruptcies as ruining your credit history for the rest of your life, which isn’t necessarily true.

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      • avatar

        rangerchic January 17, 2012, 4:57 pm

        It doesn’t ruin your life forever. My parents had to file oh it has been about 8-10 years ago now (due to unforeseen circumstances – my parents were devastated they had to do that). They are getting ready to sell the house they have and buy another one with a pretty good interest rate. So it is something to consider and it won’t ruin your credit life forever.

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      • avatar

        Eljay January 17, 2012, 5:47 pm

        So very true. I filed bankruptcy in 2005, it was discharged in 2006 and I bought a house in 2008. It’s not the end all that most people think it is. Life goes on.

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      • avatar

        cporoski January 18, 2012, 8:59 am

        I totally agree. 5 years is not that long in the long run. It seems that way but it isn’t. I think it is the lesser of two evils in this case.

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  • avatar

    silver_dragon_girl January 17, 2012, 3:41 pm

    I’ve never been so thankful for my dysfunctional, but loving family.

    LW, I’m so sorry you’re struggling with this. It’s so unfair. Please take Addie’s advice and get yourself a lawyer right away!

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  • avatar

    6napkinburger January 17, 2012, 3:42 pm

    It sounds to me like LW doesn’t want to sue her parents because (a) they’re her parents; and (b) they have no money (see selling the house). She might figure: what’s the point if they can’t pay it?

    The point is that it is killing your credit and is currently racking up more debt. So even if they don’t have the money to pay it, it will make it THEIR responsibility to pay it, not yours.

    Also, depending on what kind of company it is, your personal liability may be limited. But you need to go see a laywer. But go with all the paper work you can get your hands on). Your parents won’t go to jail; you aren’t prosecuting them, you are suing them. And truthfuly, they should expect it.

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    • katie

      katie January 17, 2012, 8:32 pm

      but what happens when the parents die and their debt is inherited by her?? does that even happen??

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      • avatar

        jess January 18, 2012, 2:28 am

        no

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      • avatar

        MarkD January 18, 2012, 1:48 pm

        More precisely, not in the United States. In Japan it was and possibly still is different.

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  • FireStar

    FireStar January 17, 2012, 3:50 pm

    Are there any government programs that offer credit management where you live? Maybe start there – they might be able to refer you to a lawyer who can help you get this straightened out. Or contact the bar association for your area to find out about any pro bono work by lawyers in your area. But even if you have to pay a lawyer to fix this then that is money well spent. I think your best best is to attempt to reverse the transaction on the basis of fraud. The debt then becomes your parents’ problem as it should always have been.
    I’m sorry that you are going through this. I can’t imagine this level of betrayal is something processed very easily – I hope you have people to talk to about the emotional aspect of all this. Your parents acted with complete disregard for your well being – it really is shameful on their part. I can’t imagine what the excuse for doing this to you could be. They transferred the tax liability knowingly to you so they could avoid paying it – there is just no way around it. I hope you will update us to tell us that you have reclaimed your credit and your life. Best of luck to you.

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    • TaraMonster

      TaraMonster January 17, 2012, 4:12 pm

      Good point about looking into public resources. The New York Public Library offers free financial consultations. I have an appointment next week. They also do people’s taxes for free if they may 49K or less a year:

      You’d be surprised what public resources available if you dig around a little. LW might even be able to get legal aid somehow.

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  • Budj

    Budj January 17, 2012, 3:56 pm

    Someone actually involved in finance please feel free to correct me…but if you think about the cost of a lawyer…versus the savings you will experience in your future interest rates….you will be much better off getting a lawyer and fixing things as much as you can.

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  • avatar

    ABC January 17, 2012, 4:01 pm

    Great advice Addie Pray!

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    • avatar

      Addie Pray January 17, 2012, 4:22 pm

      oh my favorite coworker who manages to get work done during the day while I am dearwendying!

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  • TaraMonster

    TaraMonster January 17, 2012, 4:01 pm

    It seems to me what you need is convincing. And since I love to air my family’s dirty laundry on Dear Wendy, I present you with a lovely anecdote about my screwed up father:

    For two years my father received child support from my mother for three children when only one was living with him. In NY child support continues to age 21 if the children remain in the household. I was over 18 and living on my own, and one of my younger brothers was living with my mother. He was also declaring me on his taxes even though I’d emancipated myself -which he attempted to contest with the state, but I was luckily able to prove he wasn’t financially assisting me in any way. When I was in high school he also tried to steal my settlement money that was untouchable until I turned 18. Thankfully he wasn’t able to access those funds.

    It took two years to get the child support case seen in family court in part because my mother’s mental illness makes it difficult for her to get things done and be taken seriously. My father had the nerve to contest this case as well, which is even more despicable considering he makes twice what my mother made. The whole time he would try to sweet talk me into things- like not testifying against him in court. “I’m your father,” he said with tears in his eyes. “Yes you are, dad. And thanks to you I have an exceptional bullshit meter.” My mother’s sister had a lawyer friend represent my brothers and I pro-bono (bless her) and I sure as hell showed up in court to testify. He wound up owing my mother many thousands of dollars.

    The point is- you do not have a choice here. You have to take them to court. The nightmare will never stop and there’s no telling what else your parents- who clearly have access to your SS#!!!- might do in your name. It doesn’t matter what they say or how much they profess their love. Take care of yourself and your future. Some of us have crummy parents, so we have to parent ourselves. If you don’t spend the money on a lawyer now, you won’t have two nickels to rub together later.

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    • avatar

      AKchic January 17, 2012, 6:01 pm

      Completely agree with you. This is just what she KNOWS so far. Who knows what else they have done that the LW doesn’t know about.

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    • avatar

      Britannia January 17, 2012, 7:58 pm

      After all this is over, LW, it might really be worth it to go through with being issued a new SS number. I know you want to think the best of your parents, but there honestly are really shitty people in this world who can justify it to themselves to commit fraud with their children’s identities, and you have to accept that if it quacks like a duck… it probably is a duck.

      Your parents used your identity, with malice aforethought, to get money in a shady way and saddle you with all the consequences of their actions. I wouldn’t trust them to never do it again, and since they already know all of your personal information and probably have copies of all your major identification documents, it really will be easier (it will put your mind at ease, at least, that they can’t commit fraud again) to get a new SS number.

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      • avatar

        AKchic January 17, 2012, 8:14 pm

        Great point.

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  • avatar

    Elle Marie January 17, 2012, 4:10 pm

    Aside from the “get a lawyer” advice, I would also recommend finding someone to give you general financial advice. Sometimes your work or bank will have financial advisers available for free or at a discounted rate, and they may be able to advise on other ways to help get your credit and your financial assets together. They may also be able to refer you to a good attorney to deal with the legal issues and owed taxes.

    Just a personal story about the power of a good tax attorney – my grandparents got into some trouble a few years ago because my grandfather (who was diagnosed with dementia not very long afterward) failed to pay taxes on the income from some annuity funds. They owed a large sum of money in back taxes as a result, and a tax attorney recommended by their financial adviser helped negotiate down some of the fees and work out a payment plan that was more manageable (and helped convince my grandmother to have a certified accountant take over filing their tax returns). A good tax attorney (or, since you case is more complicated, you may need an attorney specializing in a slightly different field) will be a huge help in resolving this issue and helping you move forward.

    If you can afford it in addition to legal fees, it might also be helpful to find someone to talk to (either a therapist, licensed social worker, or another professional listener) while you go through the process of resolving the financial and legal quandary you’re in. Even if it wasn’t done maliciously, it sounds like your parents took advantage of your trust and failed to respect the consequences their actions would have for you. Your future (and certainly your credit score!) have been negatively impacted by what they have done, and nothing can truly fix that. Pursuing the legal route (which, since your parents have shown such disregard for your finances and interest, is really the only way to go at this point) is likely to stir up a lot of anger and other issues with your family. Finding a solid support system apart from your parents (and other family, who may either side with your parents or want to stay out of the situation entirely) will help you get through it. Things can get better, and they will get better as long as you are able to take the steps necessary to protect yourself and your future.

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    • avatar

      ForeverYoung January 17, 2012, 10:45 pm

      I might be biased becaue I went to law school, but lawyers often save people more money in the long run than they take (i.e. work for). Everyone is so afraid of lawyers because of their “outrageously high” costs, but with situations like this they will help you out so much. A good lawyer for the LW could possibly get the debt renegotiated and sue her parents for the rest, seeing as how they fraudulently induced her to be responsible for it in the first place.

      My husbands grandparents got screwed out of over a million dollars because her brother convinced his 97 year old mother to change their will. Guess who told them to get a lawyer while she was still alive? I did. Geuss who didn’t listen? They didn’t. Guess who told them to get a lawyer after she died and when their suspicions of his shittyness were solidified but the estate hadn’t been distributed yet? I did. Guess who doesn’t have a million dollars? You get my point. But they were too cheap to spend the 20,000 for a million dollars. Ridiculous.

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    • avatar

      cporoski January 18, 2012, 9:11 am

      great advice. I feel so bad for the LW

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  • avatar

    anonymous January 17, 2012, 4:12 pm

    dear lw, i feel so sorry for you!

    i know it must be hard suing your parents. it might seem like a horrible thing to do as a child. the truth is, however, that your parents shouldnt have taken advantage of you. your mother said she never meant for this to happen, but honestly, why would your parents make you put YOUR name under those documents, not their own? there can only be one reason: so they’re not responsible for whatever might come. i also agree that if you have to pay tax, there should have been profit first, and from your letter i gather you never saw any of it. frankly, your parents outrage and disgust me.

    i also agree that while a lawyer is expensive, NOT dealing with this will be much more expensive in the long run. this mess already “cost” you having to drop out of school! i am european, but from what i have heard, having a bad credit will affect your future in the most horrible ways. i like the idea of a “payment plan” or maybe even a foundation that can help you cover the cost of a lawyer. again, i am not american, but i am sure there is a way.

    lastly, i advise you to search help – whether it be a really good, trusted friend, or even a therapist. you dont mention anything about your relationship with your parents, but this must have come as a huge shock. i dont think you should try to manage the emotional consequenes of this alone. get a shoulder to lean on, because if you are suing your parents, it will most likely be very, very exhausting.

    good luck!

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  • Jess

    Jess of CityGirlsWorld.com January 17, 2012, 4:22 pm

    LW, I’ll add JUST for the sake of covering all bases, that if your parents truly did not mean you harm, now is the time to draw them in. Was this mean to be your trust fund of sorts? Was this meant to be your livelihood after high school?

    Re-reading the letter, you don’t mention if you asked them to remove you as business owner, to co-sign for a student loan, lend you money, or otherwise help you find a way out of this mess?

    What is their present situation? Are they working again? Earning money? Are they offering in any way to make this right? Do they have a history of lying to you and/or ignoring your basic needs and safety?

    So many unanswered questions. We’re all assuming that they ARE being malicious but I just want to be SURE that’s what you think as well. Because if their intentions were honorable and this has unexpectedly blown up in their faces, maybe asking them for help would be a path more amicable and less expensive.

    However, I agree with everyone that it IS a mess and it CANNOT be ignored simply because you feel bad for your parents. Clearly this mess has already destroyed some of their lives. It should not destroy yours too, just as you are getting started.

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    • FireStar

      FireStar January 17, 2012, 4:57 pm

      I think your point is excellent. It is clear the LW wants to shield her parents from the consequences of their actions but what are the parents now willing to do for the LW? If the mother never intended this to happen then she and the father should avail themselves the lawyer’s office with the LW to do whatever is necessary to put the debt back in their name and repair their child’s credit. If they refuse, dear LW, you really have no choice but to pursue legal action against them with a clear conscience knowing you tried everything in your power to alleviate their assumption of the debt.

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    • avatar

      AKchic January 17, 2012, 6:12 pm

      What stands out for me is the fact that the parents didn’t attempt to make amends in the first place. They didn’t inform their daughter of anything when they had her sign the documentation when she turned 18. They basically said “here, sign this”. There was no disclosure, no information, nothing. She was kept out of the loop for nearly six years. That doesn’t scream “well-intentioned” to me. Even a semi-half-assed business owner would tell the “in-name-only” business owner/partner about the financial troubles of the jointly-owned business, if only to “CYA” (cover your ass) in the eventuality of a lawsuit of one business owner against another, familial ties or no.

      My assumptions on this was that the business was floundering in debt/loans/whatever and they held on until the LW turned 18, at which point, they “sold” the business to the daughter and signed over everything to her, so she assumed all bad debts/loans/whatever and the parents attempted to “fix” the problems they created under “new management”. They did not inform the LW of any of the issues, did not inform her of her rights and prevailed on familial ties, loyalties and her age and relative naivity (sorry, LW, but your parents did expect you to be “young and dumb/innocent” in this regard). It was calculated in the best of light. Malicious and predatory in hindsight with the way things have gone. If the economy hadn’t tanked and their plans HAD gone the way they’d wanted, you may have been okay, but you would never have seen a dime. They would have kept it all and then asked you to sign over the company back to them once the business started making a decent profit again.

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      • avatar

        Britannia January 17, 2012, 8:05 pm

        Yes, thank you. From an objective perspective, there’s really only two possibilities when it comes to assessing the parents’ intent when they signed over the business:

        A) They legitimately wanted to give LW the business.
        – If so, why didn’t they explain to the LW about taxes, responsibilities, etc? They’re absolute IDIOTS if they expected her to just leap into business management without any assistance or preparation.

        B) They were trying to hide the business’ success/failure from their own credit scores and financial responsibilities.
        – There’s really no way to not arrive at this conclusion. They deliberately never bothered to pay the taxes once LW was in charge of the business, but also didn’t bother to tell her that taxes would be due. LW never mentions receiving any money from the business, so that means the parents pocketed the money. It was basically an easy way for them to get some income for a few years without having it taxed away and also not having to deal with the repercussions once the IRS caught up with them. They HAD to have known it would happen eventually, and they simply didn’t give a fuck, for lack of a better word. There’s absolutely no way that they had “good intentions” in any sense of the phrase.

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      • Jess

        Jess of CityGirlsWorld.com January 18, 2012, 10:58 am

        I don’t disagree at all. It seems the most likely scenario given what LW has told us. Again, I just wanted to consider the alternative since we don’t know the whole story and there are a lot of questions unanswered. Hopefully LW chimes in here or offers us an update in the near future. This letter will definitely stay with me and I will wonder/worry.

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  • caitie_didnt

    caitie_didn't January 17, 2012, 4:31 pm

    LW, I am so so sorry that this happened to you. What a horrible thing for your parents to have done….they jeapordized your future (your credit rating, ability to pay tuition to get an education, your ability to rent or own a home) for their own self-interest, it would seem.

    Please get legal advice.

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  • avatar

    AKchic January 17, 2012, 4:49 pm

    *hug* You need it.

    When I was 7, my father put my name on the title to a trailer to “hide” it from my mother. Why, I’ll never know, since it didn’t have a back wall, wasn’t hooked up to any utilities, and was so run-down that it was unlivable (once a wall was put in and a wood-stove put in the living room, this is where I lived during a very cold winter until social services were called). I have no idea what happened to that trailer, but I do know that by the time I turned 18, it was off my credit report.
    You will have a LONG TIME before this fiasco is off yours, and you will have a lifetime of echoes. I know, because my 1st husband’s abuse of my credit echoes around my finances to this day, nearly 10 years after our divorce.
    This doesn’t just affect YOUR life, but any children you had planned to have. If your parents were willing to do this to you, the person they claim to love unconditionally, how do you think they would feel about doing it to a grandchild? It’s time to get tough with them and draw the line here and now. In concrete, not sand. Your life is already derailed thanks to their scheming and defrauding. Only you can pull yourself out of this mess. Leave them to the soup of their own making.

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  • avatar

    atraditionalist January 17, 2012, 5:01 pm

    currently writing a factum for moot (mock trial) on a woman who signed a document before reading it based on the trust she had in her nephew who had handled all her affairs for 30 years. You should definitely seek the advice of a lawyer in your state (province) – it is possible to get free legal advice (at least in Ontario it is) but you have to qualify for it financially. I don’t know what the situation in the States is like. I know this isn’t helpful but only a lawyer can give you a real opinion on your chances. And only you can decide if you’re comfortable suing your parents

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    • caitie_didnt

      caitie_didn't January 17, 2012, 6:34 pm

      Oh hey, fellow Ontarian! Whereabouts are you from?

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      • avatar

        atraditionalist January 17, 2012, 10:08 pm

        actually from Alberta – going to school currently in toronto-what about you?

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      • caitie_didnt

        caitie_didn't January 17, 2012, 11:43 pm

        Awesome!!! I’m from outside of Toronto, originally. But I go to school in Kingston now.

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      • ScrambledMegss

        ScrambledMegs January 18, 2012, 9:54 am

        torontonian here too! 🙂

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  • avatar

    rangerchic January 17, 2012, 5:05 pm

    I agree you should move forward with suing your parents. I also think it will be incredibly difficult. I’m sorry you are being put through this. Do you have any other family that can help you out? Either financially or emotionally? I hope something works out for you soon!

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  • avatar

    Kristen January 17, 2012, 5:12 pm

    LW, do some research into nonprofit law organizations that help people with low incomes. Around here, it’s called Community Legal Aid, and they’re great. If you qualify, they’ll take on your case for free and help you fix this mess your parents put you in.

    This isn’t your fault, and it’s upsetting to think that your parents are sitting by, watching you struggle to get student loans/housing/etc. As someone noted upthread, don’t think of it as punishing your parents; think of it as freeing yourself from this mountain of debt on your shoulders. They created it, and they need to be the ones responsible for paying it.

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  • avatar

    Jessica January 17, 2012, 5:47 pm

    This letter broke my heart and I have a feeling this will stick with me more than any other Dear Wendy letter.

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  • avatar

    Suzanne January 17, 2012, 6:22 pm

    Just remember – you cannot discharge taxes in bankruptcy! So unless there’s a bunch of debts besides the taxes, bankruptcy may not do anything for you. Good luck!

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  • avatar

    Turtledove January 17, 2012, 7:54 pm

    In addition to looking up and pursuing whatever legal resources are available to you locally, I would start reaching out to friends, former professors, and your former college. It may be embarrassing and difficult for you to talk about at first, but having a solid support system in place will help you in a lot of ways– emotional and practical support both.

    The university may be able to find a way to help you pursue your studies while you unwind this mess. And if not, they’ll certainly be able to point you to any resources that are available through the alumni offices or student affairs offices. Universities usually have the skinny on most of the free or reduced price services around town because they often refer students to them or they have students or professors involved in them.

    You may be able to find a friend of a friend who specializes in the law you need and is willing to help you out based on a shared connection or an owed favor. Whether that’s extending a payment plan or a reduced rate or even working pro bono, who can say, but you’ll probably find someone who will help you out in one way or another. Even finding that you have a personal connection involved with one of the free services you’d consider will make things run more quickly and smoothly for you. I can guarantee that most friends you have who hear about your situation will want to help and will call in connections and favors for you. The same goes for former professors. Its a horrible situation to hear about, and a lot of people will want to help. You should let them.

    It brings me to mind of a situation I found myself involved in in college. One of my roommates’ parents were involved in a nasty and bitter divorce and her tuition became one of the points of contention to the point where both parents refused to pay it. So she was on the brink of getting kicked out. All her friends and roommates and a lot of our friends clubbed whatever money we could scrape together. It was enough to cover her tuition– so she was able to pay it and stay in school. Even better, when the dust settled, her father was so embarrassed that a group of college students had to pay her tuition that he paid everyone back with interest.

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    • avatar

      AKchic January 17, 2012, 8:21 pm

      She may even be able to ask the IRS for some advice. Not actual advice, but ask them where to go for some legal advice on the matter. Her local IRS office may be able to point her in the right direction if she is in a big enough city. You never know until you ask.

      At this point, I would also recommend that she NOT discuss this matter with anyone else in her family. Not knowing what her parents have said already to other family members, or how close her parents are with anyone else (who knows, they may have already burned those bridges long ago) – she DOES need to keep her bridges with the rest of her family intact (minus the parents). If anyone else WAS involved in this, they should be cut out (even temporarily) as well. Continue building a support network that DOESN’T involve scheming mom and dad.
      Don’t throw any financial records away. Start taking an active involvement in the business you OWN. If needed, kick your parents out of it. Seriously. If it is still operating, boot them out and run the shit out of it and keep them from it.
      I would also seriously consider filing an identity theft report. Did they open any accounts in your name for the business? If so, then yes, there is identity theft going on and you need to file a report.

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  • katie

    katie January 17, 2012, 8:51 pm

    such a sad story. LW, i hope that you understand that just because these people are your parents that this all should rest on your shoulders. parents or not, people do bad things and your parents did very terrible things to you on paper.

    i have a friend whos mother committed suicide about a year and a half ago. she had been embezzeling money from her work for years -were talking hundreds of thousands of dollars- and had taken out credit cards in all of her family’s names (she used her work to pay off the credit cards as “work expenses”). she committed suicide after she had found out that she was being sued, they had evidence, and she was done for. she couldnt stand facing her family after she had done everything and so she took the easy way out. my friend is now trying to pay off the credit cards that she took out in his name… i told him that he should look into financial help of somekind. afterall, he didnt take out the credit cards! its not his debt! but he just quietly keeps paying them, as far as I know, and i think it is for the same reasons that you dont want to sue your parents. just because it is his mother who did it, somehow he feels that he should own the mistake and take care of it. please dont go down this path! it is NOT your fault and these money issues should not be yours to deal with!! it doesnt matter that its your family- the only point is that the debt isnt YOURS (or atleast it shouldnt be!). please look into a lawyer. please.

    addie, if she does get this debt taken away from her and put back on her parents, when they pass away, can she inherite the debt?

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    • avatar

      Temperance January 17, 2012, 8:56 pm

      Not legal advice … but no, she can’t inherit her parents’ debt. It would be taken against their estate.

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      • katie

        katie January 17, 2012, 9:13 pm

        thats good. how terrible would that be- spend all this money and time getting the debt taken off of you, only to have it put back as soon as they pass?

        i think i saw one of those daytime commercials talking about it, thats why i asked. im glad thats not true!

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    • avatar

      Addie Pray January 18, 2012, 12:03 am

      I’m not sure, katie. Your question is essentially can a creditor go after an heir …And I don’t know. I think it will be determined by the laws of the state in which this LW (or rather her parents) live…. and honestly I don’t know what the law of my own state is on that point. Lawyers are like teachers — lots of different kinds, and one doesn’t necessarily know the speciality of the other… like asking your math teacher about a French assignment. But what makes a good lawyer is not necessarily knowing the answers but knowing what the question is and who to ask. So I will use my “good lawyer” skills to suggest you ask an Estates and Trusts lawyer that question! 😉 ps, I practice labor and employment law, in full disclosure. 😉

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      • avatar

        DebMoore January 18, 2012, 12:48 pm

        I am not a lawyer, but I am a tax accountant and from what I understand the creditors can only go after the parents assets to cover the debts (meaning she would get nothing from her parents estate/assets) but after that they can not go after the child or any assets the child holds in her name and SSN. But thats only if the debts/liabilities do not have her name or SSN. So get that taken care of! I understand you (LW) don’t have lots of funds to pay for a lawyer, but you really really need one, and the IRS will never “forget” about the taxes. Go to IRS.gov and see how you can get a hold of the IRS and try to work with them to get this taken care of. The IRS HATES when people ignore them. But they are willing to work with you if you put in the effort. Just remember the IRS are people (not a machine) and more often than not willing to help or get you on the path to working it out. (How else are they going to get the money, if they don’t work with people?) And if you don’t like what one agent says (like if they are rude or unwilling to help) call back and get a differnt agent! Take care of this now, I can not stress that enough!!!!!! I really can’t. This will follow you for the rest of your life if you ignore it. I am so sorry your parents did this to you. And I don’t know if it helps, but I see this everyday, families screwing each over for money. Take care and take care of thia ASAP!

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  • avatar

    Temperance January 17, 2012, 8:57 pm

    Sweetie, this *was* done maliciously. They tricked you into signing a contract so that they could f your credit and leave theirs pristine.

    You need to see a lawyer. This could impact your whole life. Check your local law schools; many have pro bono projects or could point you to legal aid.

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  • Leroy

    Thomas M. January 17, 2012, 9:10 pm

    >> I can’t afford to hire a lawyer or bring myself to turn in my parents.

    If she can’t afford to hire a lawyer, she certainly can’t afford to hire a team of lawyers. And any of the options that Addie mentions would be hugely expensive to pursue. So I’m not sure that her advice is actually helpful to the LW. Though perhaps she could go to Legal Aid and see if someone there would be willing to help her.

    Realistically her best bet is probably to report her parents to the IRS and to participate in their prosecution – they’ve committed fraud and likely a few other crimes pursuant to the fraud. That’s the only way that this situation will be rectified. The same would result from her suing her parents, but she would incur tens of thousands of dollars reaching the same end point. In order for her tax debts to be absolved, the IRS needs to recognize that they are improperly assigned and this is only going to result from the determination that a fraud was committed by her parents.

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  • avatar

    Jubietta January 17, 2012, 10:45 pm

    I wonder where Anti-Ward and Anti-June got this shitty advice? I can see someone who finds loopholes for a living suggesting this as a viable and “legal” way for mom and dad to handle their business…and that’s where I can see the parents saying “it wasn’t malicious.” Maybe not malicious, but effin short-sighted with a tremendous dearth of risk management. That’s sucky parenting, to put your kid in a position of risk without taking some precautions to mitigate it.

    I’m on the bandwagon for the suit. It sucks that the parents haven’t stepped up to make it right on their own, and it really sounds like the stakes are so high…the rest of the LW’s life…that it’s time to get help in holding the parents accountable for their actnions. Thanks Addie for your levelheaded advice with practical underpinnings, always nice to see how others approach problems.

    LW, I’m so sorry that this happened and I hope you find some generous people who can not only make it right, but maybe restore your faith in humanity!

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  • avatar

    caroline January 18, 2012, 6:54 am

    I agree with everyone on how sad your situation is LW. I wish you courage and good luck.

    The only help I can bring is on french. Quels dicks= quels connards! 😉

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    • avatar

      iseeshiny January 18, 2012, 9:57 am

      And quels ducks – quels canards!

      My shameful secret is I love terrible puns.

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        Addie Pray January 18, 2012, 10:04 am

        Ha! I could see myself saying “quels canards” by mistake – my French friends get a kick out of my mess ups like that. Like when I emailed a friend that she was “right” about something we were talking about but said instead “you have raisins.” Minor mispelling can change everything.

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      • avatar

        Addie Pray January 18, 2012, 10:05 am

        “Tu as raisin” v. “Tu as raison.” Oops.

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      • avatar

        iseeshiny January 18, 2012, 10:43 am

        They wouldn’t rather have a raisin than ont raison? Well, I wouldn’t, but just cause I hate raisins. And I’d rather palm a pomme than mange a mango, but only cause I’m allergic. That tropical stuff is delicious.

        Sorry, clearly someone has laced the coffee.

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      • avatar

        caroline January 18, 2012, 4:01 pm

        I love when foreign poeple quote in french! It reminds me of my pride when I quote in english hihi!
        Plus you were still using a french word in its correct form, it’s a very small mistake!
        Maybe you wanted some good wine? (made with raisins!) 😀

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      • avatar

        Addie Pray January 18, 2012, 5:54 pm

        ou peut-etre que j’en avais deja trop bu! 😉

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  • avatar

    wendyblueeyes January 18, 2012, 9:54 am

    This is so sad but unfortunately, happens more than we would like to think. My co-worker found out that his father had opened a credit card in his name, maxed it out IN ONE MONTH and never made a payment. Another co-worker found out that his parents put all their utilities in his name while he was away at college and NEVER PAID A DIME. Each one had his salary garnished to pay the debts, it was a legal quagmire to get out of. One ended just paying all the utility bills. His credit score took quite a hit, and he couldn’t get a car loan after he graduated and had a good paying job. Both these guys had to file charges against their parents to get them to stop using their SS#. Be proactive and do something, please. Just sitting there not turning in your parents doesn’t help you now, and won’t help in the future, because they will do it again.

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  • avatar

    John Rohan January 18, 2012, 12:02 pm

    “[Disclaimer: The information contained in this Website does not constitute legal advice, nor does it create an attorney-client relationship. You should contact your attorney to obtain advice with respect to your particular issues.]”

    On another note, it’s pretty sad that an attorney can’t even feel safe about giving any advice without a disclaimer like this to protect themselves from lawsuits. Then again, it’s mainly attorneys who created that situation in the first place, so the irony is rich.

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    • avatar

      Addie Pray January 18, 2012, 12:21 pm

      Well, it’s more the dipshit reader who claimed an attorney-client relationship based on a blog that created this situation. But agreed, it’s a pretty sad state of affairs we live in. Though, this particular disclaimer issue is low, low on my list of things that leave me worried about humanity and the world in general.

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      • avatar

        *HmC* January 18, 2012, 1:50 pm

        What dipshit reader? I’m curious!

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  • avatar

    CoffeePDX January 18, 2012, 12:29 pm

    I’m a bankruptcy lawyer, working as a law clerk for a bankruptcy judge. I agree with you, Addie Pray, that LW should seek legal advice. But as some commenters pointed out, I don’t think a bankruptcy lawyer would be able to help her (based on what little I know of her present circumstances). (And as one commenter pointed out, taxes generally are non-dischargeable in bankruptcy.) I think a tax lawyer or corporate lawyer would be better equipped to handle her situation.

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  • avatar

    *HmC* January 18, 2012, 1:49 pm

    LW- I am so sorry this happened to you. I just want to reiterate Addie and everyone else’s advice to not only get a lawyer, but also get emotional/psychological help dealing with this betrayal. It’s way too much for any person to have to deal with alone, legally or otherwise. It’s hard to imagine, from the details you’ve given, that your parents did not do this maliciously. You did not deserve that. It really breaks my heart.

    Good luck to you.

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  • avatar

    Calle January 18, 2012, 2:13 pm

    If money issues are a problem, please call up a law school in the area. They often offer pro-bono clinics to let 3Ls cut their teeth and there are often professors in charge. If they hear your story, which is pretty horrific, the professor may take over or help you find a good pro-bono lawyer. I can’t stress this enough. Also, your parents are horrible, horrific people who don’t seem to have any remorse. I would call a counselor and cut off my parents, if I were you.

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