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.