' Children and Bankruptcy - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Will My Bankruptcy Affect My Children?

Filing for a bankruptcy is a very personal decision, but it can affect other people in your life. If you’ve delayed filing for bankruptcy for reasons that have to do with other people, you aren’t alone. Whether it’s the opinions of others or the fact that you have co-signers on loans who will be directly affected, letting other people affect your decision to file for bankruptcy is common.

For some, the “other people” affecting the decision to file for bankruptcy are their children. You’re more likely to postpone filing for bankruptcy if you’re worried about how filing will affect your children.

What Are some of the Most Common Concerns?

  • How does bankruptcy affect the money I’ve saved for my child’s college education?
  • Will I still be eligible to apply for loans to pay for college tuition?
  • Can the bankruptcy court take money my children have in savings?
  • How does the bankruptcy court deal with private school tuition?
  • Will bankruptcy eliminate child support payments?

Is Your Child’s Property Really Your Property?

The simplest answer to this question is “sometimes.” Property you paid for that’s used by your child – furniture, toys, clothing, etc. – is still considered your property. However, if your child paid for any of these items and you’re able to prove it, the property is not considered yours.

Chances are the majority of things your child uses would legally be considered yours. This means you’ll want to protect the things that are of value. Those filing for Chapter 13 bankruptcy will get to keep their property and those filing for Chapter 7 are able to exempt certain types of property.

The majority of property your child uses won’t even be an issue in bankruptcy. Bankruptcy trustees have no interest in children’s furniture or clothing or toys because there’s little to no value in these things. Bank accounts, on the other hand, are a different story. You’ll need to carefully work with your bankruptcy attorney to protect any money that’s invested in an account that belongs to your child.

A trust in your child’s name is not considered part of your bankruptcy, even if you happen to be the custodian of the trust. That money legally belongs to your child and nobody else, even if he or she must wait until a certain age to access it.

It should be noted, though, if you transfer money into your child’s bank account that was originally your property, it can still be accessed by the bankruptcy trustee. As a matter of fact, a transfer such as this could be considered bankruptcy fraud and result in the denial of your bankruptcy.

Educational Funds and Bankruptcy

Educational funds are treated similarly to trust funds. For instance, the federal bankruptcy code excludes 529 plan funds from property of the bankruptcy estate. You filing for bankruptcy also has no bearing on your child’s ability to qualify for a Pell Grant or Stafford Loan, but does disqualify you from credit-based loan such as the PLUS loan if you filed within the last five years of applying.

Your child can still attend private school if you file for bankruptcy, but there are tuition limits. You and your attorney can discuss your situation if private school funding is a concern.

How your bankruptcy affects your loved ones can be a major factor in whether or not you file. The good news is there is a great deal of protection available. For more information or to schedule a time to discuss filing for bankruptcy, contact the Law Offices of Robert M. Geller at 813.254.5696.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Will Bankruptcy Affect My 401k?

Bankruptcy can be a difficult decision. It’s one that has long-lasting effects on your financial future. One question that often...
Read More

Can Filing for Bankruptcy Affect Your Job?

Filing for bankruptcy can be a challenging decision that is fraught with many concerns. Among them is the fear that...
Read More

Can You Cancel a Bankruptcy?

Bankruptcy is an option that can save individuals and businesses from financial ruin. However, the process can be a long...
Read More

Does Bankruptcy Clear Child Support Arrears?

Bankruptcy is a legal process that provides relief to individuals who cannot pay their debts. One common question among individuals...
Read More

Is Alimony Dischargeable in Bankruptcy?

One of the biggest concerns that people have when considering bankruptcy is the effect on their financial obligations, including spousal...
Read More

Should You File Bankruptcy Before or After Divorce?

Marriage and finances can be a tricky combination. Timing is also an issue when it comes to filing for bankruptcy....
Read More

What’s Better Bankruptcy or Debt Settlement?

The idea of being trapped in debt can be overwhelming and all-consuming. Financial struggles can happen to anyone through no...
Read More

Can I Keep One Credit Card During Bankruptcy?

The decision to file for bankruptcy is never easy. People considering this option often struggle with financial stress, debts, and...
Read More

How Does Inflation Affect Credit Card Debt?

Credit card debt can be overwhelming. This is especially true during times of inflation. What is Inflation? Inflation is a...
Read More

Can Personal Bankruptcy Affect My Business?

If you’re a business owner considering filing for bankruptcy, it’s important to understand how this decision impacts your business. From...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions