How Are Some Ways Bankruptcy Can Affect Your Children?

1. STRESS: Being deep in debt, receiving harassing calls from creditors, being threatened with garnishment, repossessions and foreclosure will often cause you and your spouse to experience overwhelming stress and anxiety. Your children, even young ones, also feel the stress. It affects their school work and their emotional and physical health Uncontrolled debt often leads to marital conflict and divorce. The kids become the biggest losers. Filing for bankruptcy will usually relieve the debt burdens and the stress. This will often save a marriage and restore emotional as well as financial security for the entire family.

2. PROVIDING FOR YOUR FAMILY: When you’re paying out all of your income to try to cover your minimum debt payments, you often have difficulty paying for even life’s basic necessities. The little extras that mean so much to children, such as music lessons, dance lessons, tutoring, summer camp and regular health exams, are often neglected. After filing for bankruptcy, your family budget can afford to give your children much of the nourishment they need to grow into healthy and well-adjusted adults.

3. EDUCATIONAL EXPENSES: When you are having financial difficulty, it is often difficult to properly afford your children’s educational expenses. In the 2005 changes to the bankruptcy law Congress specifically allowed parents to include in their allowable expenses some educational costs for their children under 18 years old. For older children, however, Congress felt that paying college tuition at the expense of unsecured creditors should not be allowed.