Filing for bankruptcy can be a challenging time, especially for those who have children. However, sometimes it is the only option. Below is a detailed look at the impact bankruptcy can have on children.
Child’s Property Status
Any property you have purchased for your child, including: clothing, furniture, toys, books, etc. is considered your property in a bankruptcy case. However, it will not be included in your bankruptcy estate if you are able to prove that the property was purchased with your child’s income. This would apply if your child received funds from employment or other form of income. Receipts from your child’s bank account are also helpful in excluding the property from your bankruptcy estate.
Child Support Income
In the State of Florida, child support income is exempt in bankruptcy, if it has been saved in a bank account. Again, receipts are important to prove that the money in the account is indeed child support income.
Child’s Financial Assets
Any bank accounts or college savings accounts that are in your child’s name are exempt in bankruptcy. These include custodial bank accounts and 529 college savings accounts. Any deposit made to the account less than 365 days before filing bankruptcy may be seized by the bankruptcy trustee and used to repay creditors. Fortunately, any deposits made between 365 to 720 days or more prior to filing bankruptcy are exempt.
School Tuition and College Student Loans
$1,875 in educational expenses is usually allowed for minor children of bankruptcy filers. While college-aged children will still be able to take out student loans, you will be excluded from taking out loans on their behalf, after filing for bankruptcy. It is always best to speak with your bankruptcy attorney to explore how trustees view tuition payments in your area.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.