Declaring bankruptcy is a decision that affects not only yourself but also your family — in positive and negative ways. While bankruptcy can lead to increased financial stability, there are unforeseen issues that can affect other family members in a negative way. If you are contemplating filing for bankruptcy in Savannah, Georgia, talk to a local Savannah legal firm such as Barbara Braziel Law who can help you avoid future problems on your path to financial success. From child support to joint assets, here is what you can expect when you file for bankruptcy:
Under Chapter 7, you are still required to pay ongoing child support payments. Child support debt is not part of the stay, and you can be sued for collection of any unpaid child support. Wages that are earned after your filing date are not considered as part of the prior estate and can be targeted by child support creditors.
If you’re married and you’re considering Chapter 7 or Chapter 13, you can either file as an individual or jointly. If you file as an individual under a Chapter 7 filing, accounts and assets that are under your spouse’s name are not part of the bankruptcy. Joint assets and accounts are considered, though. Your personal credit rating will reflect the bankruptcy. Chapter 13 does not require liquidation of assets.
Joint Home Ownership
If you and your partner jointly own a home and are jointly filing for a debt discharge, then your home can be considered during a Chapter 7 filing. However, most states offer homestead exemptions for Chapter 7 filings. Many times, however, there may be limitations on the amount that is protected, depending on the amount of equity in the home. If you have more equity in the home than the exempted amount, then the trustee could sell the home if the difference would net a substantial amount. A Chapter 13 filing does not liquidate the estate.
529 accounts are college savings accounts. While these accounts may be protected during a Chapter 7 filing, there are strict guidelines that must be followed. If the money was placed in the 529 account between one and two years prior to the filing, then $5,000 of that specific amount is exempt. If placed two years prior, the total amount in the account is protected. In both cases, the beneficiary must be your child, step-child, grandchild or step-grandchild.
These are just some of the questions and considerations that need to be thought about and addressed during a filing. An experienced legal expert can help you during this process and provide you with the information you need to make informed decisions.
Before committing to a course of action, consult with the compassionate and knowledgeable lawyers at Barbara Braziel Law. Contact us today at 912-351-9000.