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Bankruptcy Lawyers in Raleigh, NC Explain the Effects of Bankruptcy on Children
Bankruptcy is a difficult decision, and it becomes even harder when there are children in the picture. Weik Law has assisted many individuals worried about how bankruptcy will affect their children’s lives, such as their college funds, child support, bank accounts, and more. This is a very legitimate concern.
To help relieve some of your worries, our bankruptcy lawyers in Raleigh, NC address some of the most common issues that surround bankruptcy and children.
How Will Bankruptcy Effect Your Children?
Bankruptcy and a Child’s Bank Account
Any money in your child’s bank account is theirs as long as it’s held in trust for them. Since it is not your money, you cannot use it for yourself. That’s why creditors and the bankruptcy trusty cannot touch that money legally.
However, transferring money in your child’s account before you file can be considered potential fraud. In that case, the bankruptcy trustee may be able to take that money.
Bankruptcy and Your Child’s Property
Bankruptcy courts consider your household property yours alone. This includes items you gave your child, such as toys, bedroom furniture, and clothing.
What happens to your property depends on the type of bankruptcy you’re filing for. Under Chapter 13, the payment plan allows you to keep all your property. Under Chapter 7 bankruptcy in Raleigh, you may only keep exempt property.
Now, even if your child’s items don’t fall under exemptions, there’s a very high chance you can keep them. The bankruptcy trustee wants assets that can help pay off your creditors, and children’s items rarely count unless they have great monetary value.
Bankruptcy and Child Support Payments
As bankruptcy lawyers in Raleigh, NC, we often get asked if child support payments can be discharged or eliminated through bankruptcy. The answer is no.
The bankruptcy court considers child support obligations as priority debts. In fact, you may not be able to obtain a discharge if you’re not current on your child support payments. This applies to both Chapter 13 and Chapter 7 bankruptcy.
Bankruptcy and Your Child’s College Education Loans
Despite your bankruptcy, your child will still be able to qualify for need-based college education loans like Stafford Loans and Pell Grants.
On the other hand, you won’t be able to qualify for financial aid based on credit due to your bankruptcy. In this case, your child can still qualify for higher Stafford loan limits if you can’t get credit-based loans like PLUS (Parental Loan for Undergraduate Students).
Bankruptcy and Your Child’s Income
Bankruptcy trustees generally won’t take your child’s income. In addition, many states have exemptions designed to protect the earnings of a minor.
Create a Better Future for You and Your Loved Ones Through Bankruptcy
Filing for bankruptcy is a tough decision, and it’s even tougher when your family’s future is on the line. Let our expert bankruptcy attorneys do the hard work for you. Call Weik Law Office today at 919-845-7877 for a free consultation, and set up a time to speak with one of our friendly professionals.