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Debt settlement could improve the lives of children

When an Arkansas family is struggling under a heavy burden of debt, stress levels will rise. Increased stress can bring on tension between spouses and can make it difficult to enjoy life. What many parents fail to understand is the impact that serious debt can have on their children. A recent study looked at the issue, and the results may lead some families to give debt settlement or bankruptcy serious consideration.

The study looked at more than 9,000 children between the ages of 5 and 14, and evaluated the level of debt held within their families. Researchers tracked the behavior of those children over time, as debt levels changed within the families. The final result was the determination that high debt has a serious impact on the behavioral health of a child.

The researchers determined that behavior problems in children more common among families with more than $10,000 of unsecured debt, at a rate of .12 standard deviations as compared to kids from homes where debt was not an issue. In families who saw an increase from $5,000 in debt to $10,000, behavior problems rose a standard deviation of .5. It is important to note that the study differentiated between "good" debt, such as a mortgage or student loans, and "bad" dent such as credit card bills.

Ironically, many Arkansas parents take on debt in order to provide their kids with opportunities and experiences that they feel are beneficial. This study suggests, however, that taking on too much debt can be detrimental to the well-being of one's children. For families who are saddled with insurmountable levels of stress and are concerned about the impact that their financial scenario might place on their kids, it may be time to consider whether debt settlement or bankruptcy could be positive decisions.  

Source: fool.com, "Here's How Your Debt Can Harm Your Children's Happiness", Maurie Backman, Feb. 21, 2016

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