When parents file for Chapter 7 or Chapter 13 bankruptcy , the bankruptcy trustee is not allowed to seize any existing accounts designated for a minor. But the bankruptcy trustee can prevent a debtor from continuing contributions to a child's account including a college fund or college trust. Not only can the bankruptcy court demand that a parent in bankruptcy stop contributing to a minor's college fund, they can demand that the parent cease paying tuition for or sending money to a child already in college.
While a bankruptcy trustee allows debtors to pay for necessities such as rent, food, utilities and medical expenses, paying for a child's college education is not considered essential under bankruptcy law. Basically if your child is at least 18 years old the bankruptcy court will not allow even small contributions to the child's income.
If you are considering filing for bankruptcy, but are currently paying for an adult child's education, speak with a bankruptcy attorney to find out how you can possibly help your child through college before you file for Chapter 7 or Chapter 13 bankruptcy.