Family debt occurs when an adult family member asks another family member, often a parent, to finance debts on their behalf.
This may be by acting as the guarantor of one or more loans. Remember, guaranteeing a debt comes with serious risk and you should be aware of the consequences before agreeing. As a guarantor, you’re guaranteeing that the loan payments will be made. That means you’re responsible for the debt if the family member is unable or refuses to make the payments.