Dear Dr. Tightwad - We just found out that our 14-year-old son has signed up with a mail-order music club to get eight compact discs for one cent. Now he's obligated to buy six more, at a potential cost of more than $100.

My son doesn't have that kind of money. If he doesn't pay up, will we have to?


Neither of you should have to pay. If you don't, however, Dr. T assumes you'll return the CDs.

In general, minors (usually those under the age of 18) can disavow contracts such as these, and their parents (or other legal guardians) can't be held responsible. Write to the music club and explain the situation.

Ralph Colin, a senior vice-president at Columbia House, one of the major CD clubs, says Columbia would let you off the hook under the circumstances you describe.

"If the parent comes and says, `My son is a minor and he joined without my being aware of it,' we will cancel the membership and the obligation," Colin says.

Some kids get tripped up on "negative option" plans, which require you to refuse a selection actively or be billed for it automatically.

If your son planned to continue his membership, you could probably get the club to switch to a positive option plan - in which he'd be sent only CDs he specifically ordered - once he had fulfilled his initial obligation.

(FYI: This strategy also works for adults who are members of music or book clubs.)

Sometimes parents aren't aware that their kids are piling up debts until the dunning letters start arriving.

Don't be intimidated by fancy legal stationery. Write back and explain that your child is a minor, and the letters should stop.

Lest kids get the wrong impression - that it's OK to welsh on a deal - consider imposing your own penalty, like taking away the earphones.

Dear Dr. Tightwad - I heard that parents are going to get a break on the "kiddie tax." Is that true?

Answer - This is one tax break that doesn't need to be passed by Congress. In 1995 kids can have an extra $100 in unearned income before the kiddie tax kicks in.

Each child under age 14 can earn $650 in interest and dividends without paying any taxes. That's up from $600 in 1994.

The next $650 of unearned income (also up from $600) would be taxed at the child's rate, presumably 15 percent.

Investment income above $1,300 would be subject to the "kiddie tax" and be taxed at the parent's top rate.

Don't confuse the kiddie tax with the Republican proposal to create a tax credit for children under 18. That's still on the drawing board.