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Are assets in your children's names like custodial accounts and 529 plans protected if you have to file bankruptcy?
Wiki User
∙ 8y ago
I don't know anything about 529 plans, and I can't cite any law or cases, but it has been my experience - in Southern Indiana at least - that trustees don't usually pursue joint accounts with balances in excess of the exemption limit IF the accounts were not funded by the debtor. In other words, if a debtor has a joint account with a child with a $5,000.00 balance, and Indiana only allows a debtor to have at most $100.00 in cash exemption, then if the debtor can show that the account was funded by the child's grandparent and that the debtor's name is on the account solely as a custian for the child, then the trustees usually do not pursue the funds. If however the debtor funded the account, trustees do normally pursue the funds. If trustees didn't pursue the debtor-funded accounts, then any person who knows they're going to file bankruptcy and who has more cash than bankruptcy allows them to keep would simply open an account in their child's name and dump all of the cash into it.
Another possibility: I haven't had this happen, so I don't know for sure and I am doubtful that it would work, but trustees may let you keep a debtor-funded joint account IF the account was funded long enough ago to convince the trustee that title to the funds did pass exclusively to the child and the debtor could not have done it in anticipation of bankruptcy because it was so long ago (more than a year ago at least). I don't know if this would work or not, but by analogy, debtors may put money into their own exemptable retirement plans and it's safe (in Indiana at least) as long as the retirement plans were funded more than 1 year before the bankruptcy filing (since this is the amount of time Indiana decided was long enough ago that the debtor didn't dump cash into the retirement fund in anticipation of bankruptcy). My overall thoughts are that how each district handles this question probably varies widely from district to district, so it would be a good idea to consult an attorney in your area.
Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
Wiki User
∙ 8y ago
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How can a minor trade stocks?
Through a custodial account. An adult can setup a account and add you as a custodial. The custodial makes the trades through your accounts, but the money remains separate from both accounts.
Does updating collection accounts to a bankruptcy lower your credit score?
The fact of filing bankruptcy is already going to lower your credit score, and the point of bankruptcy, part of it anyway, is to resolve unpayable debt such as collection accounts. It is in your best interest to add the collection accounts to your bankruptcy, but if you consult your BK attorney, he is likely to advise you of this. The bankruptcy is the first next step in repairing your credit and improving your credit score.
Can you keep your IRA when you file for bankruptcy?
Absolutely. It being exempt from creditors is a main benefit of qualified retirement accounts. Not "absolutely." Properly established IRAs are protected up to one million dollars, and a bankruptcy court can extend that higher. Any money that you withdraw from an IRA, unless it is all placed in another IRA or a 401(k) or other qualified retirement plan, is not protected.
Do you still owe your debt if the credit card company went bankrupt?
Yes. Unpaid accounts with a company that has filed for bankruptcy are still collectible. Outstanding accounts become part of the bankruptcy proceedings.
Can you declare bankruptcy if you have retirement account and savings account?
Yes, you can file a Bankruptcy if you have a retirement account. Most retirement accounts are not considered to be part of the bankruptcy state, and are out of the creditors' reach. This includes traditional 401(ks), IRAs, government retirement accounts such as CalSTRS and more.
Will I lose my retirement accounts or payments from social security if I file for bankruptcy?
Generally, no. Retirement accounts that are ERISA-qualified aren't considered property of an estate and cannot be taken. Social Security benefits are generally protected from assignment, or garnishment for debts in bankruptcy. The Social Security Administration's responsibility for protecting benefits against legal process and assignment usually ends when the beneficiary is paid. Once paid, the benefits continue to be protected only as long as they can be identified as Social Security benefits. For example, money in a bank account where the "only" deposits into the account are direct deposits of Social Security benefits are "identifiable" and generally protected.
The accounts that you discharged in bankruptcy should no longer show on your credit report after 1 year?
The accounts can remain up to seven years after the last payment was made, but will show a zero balance due to a bankruptcy filing.
Are accounts after bankruptcy included in bankruptcy?
Any debt that you accumulate before your bankruptcy filing and have listed on your petition will be eliminated when you receive your discharge as long as your creditors do not file an injunction against you. After you receive your discharge you are welcome and able to open new credit accounts but any debt you accumulate will not be considered a part of the bankruptcy you filed before opening the account.
What are the benefits of having a custodial account?
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Once Bankruptcy has discharged your creditors can they still be listed as adverse accounts?
Yes.
If you are not paying your creditors will you lose the money in your bank accounts in the bankruptcy?
Yes, once the bankruptcy is filed checking and savings accounts become part of the debtor's assets and the accounts will be "frozen" until the trustee determines the amount of funds that are not exempt under BK law and can be seized to pay creditors.
When can a minor claim a custodial account in Michigan?
18 is the age of majority in the state of Michigan for Custodial accounts. In order to receive the funds the minor & the custodian must submit a form to the company where the funds are held.
