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Are My Children's Assets Protected in Bankruptcy?

Posted By Allmand Law Firm, PLLC || 28-Apr-2014

 Children's Assets and Bankruptcy

When you file bankruptcy protection debtors are required to list their assets. This information is recorded in Schedule C of your filing documents or your petition. If you have children you may have concerns about their property and whether bankruptcy can assist in keeping them away from creditors. In most cases, this is not an issue to worry about but there are situations you may want to discuss with your bankruptcy attorney to ensure clarity of the matter.

Even though you are required to list assets you have, when it comes to your children's assets it may depend on what the asset is and the age of your children. If you have minor children, it is likely any property they have would be owned by the parent, such as toys, furniture, and clothing. If your child paid for something with their own money it may not be considered your property. An example would be if you have a 16 year old who worked part-time and bought a used car. The car is not yours so the court will not be able to seize it.

If you transferred property to your child, this may be questioned depending on what the asset is and when the transfer occurred. Some parents do this in order to hide assets prior to filing which is considered a form of fraud if your attorney is unaware it occurred. There are legal ways to protect assets through state and federal exemptions. If you have a trust fund or bank account these funds may be protected depending on how long they have been active and contributions made to them.

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