Filing bankruptcy in Atlanta, GA with the help of a licensed certified bankruptcy attorney can set you up for a future without debt. Although, the process of filing, court proceedings, gathering documents, and paying off your debt is not a walk in the park. Are you filing for bankruptcy and scared you won’t be able to meet the needs of your children financially? Do you want to understand how to explain bankruptcy to your children (if necessary) and wonder how it will affect them? There are some crucial tips to know.
Filing Bankruptcy in Atlanta, GA
The most vital thing to know when you decide to file bankruptcy is: You will not lose everything. It is important to remind yourself of this in your hardest, most stressful moments during the bankruptcy process. Exemptions allow debtors to protect property such as a home or car. These belongings are considered essential to work and life and can be safeguarded. Federal bankruptcy exemptions are generous. In most cases, your child’s “property” will be exempt.
Will my children lose personal property because of my bankruptcy filing?
Not always. If you own a home, then all assets are considered yours, even items you bought for your children (furniture, games, toys, electronics, etc.) Every item in your house needs to be listed to show to the court. Any purchase made by a minor with a receipt to show for it does not have to be listed as the property of a parent filing bankruptcy. This is especially helpful if your child has a job.
In a Chapter 13 bankruptcy, you can keep all your property. With Chapter 7, your trustee can legally take and sell any property not covered by exemptions to pay off creditors. These items could include things bought for your children. Although, rarely do trustees liquidate household items unless something is of high value.
Common Questions Regarding Bankruptcy and Minors
Am I required to still pay child support in bankruptcy?
Yes. Bankruptcy doesn’t take away your obligation to support your child(ren); child support is not dischargeable. Overdue child support payments (known as child support arrears) take precedence in debt and are usually paid first in Chapter 7 and Chapter 13 bankruptcy. Requesting a discharge is possible, but it is best to speak with a licensed attorney regarding this.
What happens to my child’s bank account if I file for bankruptcy?
A guardian is required to be the account holder in standard checking or savings accounts for minors. Therefore, your minor child’s account is considered your property and needs to be listed as your asset. Fortunately, these accounts can be exempted, for specific circumstances.
A trust set up for your child is a different issue; trusts are not your property. A great example is a common trust known as the Uniform Gifts to Minors Act (UGMA) which cannot be listed as your property or used to pay off debt.
Filing Bankruptcy and Kids’ College Funds
Will my child be able to obtain college loans if I file for bankruptcy?
Yes. Your bankruptcy does not remove your child’s ability to obtain financial aid such as Pell Grants and Stafford Loans. Although, bankruptcy will probably disqualify you from loans, such as for your education. Unfortunately, if your child relies on you to help pay, you may struggle as you pay off your debt.
If I file for bankruptcy, will something happen to my child’s 529 account (college savings plan)?
Maybe. As other items stated above, if the plan is in your name, it needs to be listed as your property. Yet, funds need to be deposited at least a year before filing bankruptcy to receive partial protection. Thankfully, funds deposited two years before a bankruptcy filing are fully protected up to $6,425 per beneficiary.
File Bankruptcy in Atlanta, GA with a Licensed Attorney
Are you looking for a fresh start financially for yourself and your children? If you are suffering from overwhelming debt, filing for bankruptcy in Atlanta, GA may be the right choice for you.
Explaining bankruptcy to your children may not be easy, but CMC Law is here to support you. Get the legal counsel you need and deserve to successfully file bankruptcy and surmount your debt for a brighter financial future.
Contact CMC Law today online or call 404-585-0040 to receive your free bankruptcy evaluation or to get started with legal representation.