Filing for Chapter 13 bankruptcy may be the best choice for you, in helping you successfully manage your debts. In general, Chapter 13 bankruptcy can allow you to hang onto all of your property; it's suited for people who have a steady income and are managing to pay for basic living expenses.
However, people filing for Chapter 13 bankruptcy will still understandably have a number of concerns. A common worry pertains to children's education. You may have doubts about how you'll pay for tuition and other educational expenses for your children's college or private school, and whether or not your children will still be eligible to apply for certain loans and financial aid.
There isn't a one-size-fits-all answer for these concerns. However, the following are some points to consider:
- Children can still be eligible for a variety of loans, grants, and scholarships, regardless of whether their parents filed for Chapter 13 bankruptcy. For example, they could obtain a Stafford loan or other federal student loans, receive scholarship money from their university, and take advantage of a federal work-study program.
- You may have more difficulty obtaining a Parent Loan for Undergraduate Students (PLUS loan), if your discharged entered shortly before applying for the loan. One way to secure a PLUS loan even if you've recently filed for bankruptcy, is to have a cosigner with a good credit history.
- With a recent bankruptcy, private student loans will by and large be very difficult to secure if you're the borrower or cosignor.
- When it comes to financial aid determinations based on parental income, you'll need to check if your child's school accounts for the fact that you're required to make regular payments to your bankruptcy trustee.
- What about tuition to a private school? If you're planning to pay back your creditors completely, perhaps the court will grant you permission to continue paying for private school, particularly if the tuition isn't exorbitant; the details would have to be negotiated on a case-by-case basis. You could also make other arguments in court based on the child's well-being; for example, if there are low-quality public schools in the area or you're sending your child to private school out of religious convictions, you may be able to make the case to continue with private school.
Chapter 13 bankruptcy can be an excellent way to manage your debt, but only if you carefully consider and prepare for how it will affect your life and the well-being of your loved ones. Funding a high-quality education for your children is still possible and will increase in likelihood if you enlist the services of an expert attorney. Contact us so that we can advocate for you and your loved ones during a Chapter 13 bankruptcy.