News & Announcements

What Happens to my Children’s Assets When I File Bankruptcy?

May 3, 2017 | Category: Bankruptcy

Each debtor seeking bankruptcy protection must make full financial disclosure to the court. This means that he/she must disclose all of his/her assets, including those that are really owned by his/her children. What happens to those assets will depend on your individual circumstances, so it is important that you discuss these assets with us before your filing.

For example, since minor children cannot open bank accounts in their name, it is common for parents to open custodial bank accounts (UTMA accounts) for their children. As long as the only money that is deposited into such an account is the child’s money, and as long as the parent doesn’t use the money for his/her own purposes, the money will not be a part of the parent’s bankruptcy estate (it will be protected).

One factor that can impact how an asset is handled in a bankruptcy is whether a child purchased the personal property with his or her own money. For example, if a debtor has a teenager who has a job and purchased a car to drive to school and work, we can likely prove to the court that the car is not the parent’s asset, and should be excluded from the parent’s bankruptcy estate.

An area where parents can get into trouble occurs when they transfer assets to their child prior to filing their bankruptcy case. The trustee assigned to the case will investigate any transfers of property to determine if the parents were attempting to protect their assets from being included in their bankruptcy. This is referred to as a “fraudulent transfer” and it can cause issues in a case. A seasoned bankruptcy attorney can help you avoid these issues. Don’t get yourself into trouble – let us help you understand what assets are protected under the law before you file your case.

Please keep in mind that every bankruptcy matter is different. If you are considering filing for bankruptcy protection, and you would like to schedule a no-cost consultation to discuss your options, please contact our office by completing the form on this website, calling us at 954-920-5355, or emailing us at info@lsaslaw.com.

Leiderman Shelomith Alexander + Somodevilla, PLLC

Fort Lauderdale

2699 Stirling Road, Suite C401
Fort Lauderdale, FL 33312

T. 954-920-5355 | F. 954-920-5371

Miami

2 South Biscayne Blvd, Suite 2300
Miami, FL 33131

T. 305-894-6163 | F. 305-503-9447

© 2019 Leiderman Shelomith Alexander + Somodevilla, PLLC. All Rights Reserved. | Law Firm Essentials by PaperStreet Web Design

The hiring of an attorney is an important decision that should not be based solely on advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. The information contained on this website does not constitute legal advice and is intended for general informational purposes. Also, the information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney client relationship. Also, the information contained on this website is not intended to be an advertisement and any unauthorized use of the information is at the user's risk. Reproduction, distribution, republication and retransmission of any material contained on this website is prohibited without the express written consent of Leiderman Shelomith Alexander + Somodevilla, PLLC.