College Funds and Bankruptcy

Sending a child to college can be very expensive for many parents and often requires extensive financial planning. Some parents choose to establish savings accounts specifically for their child’s future education, while others may set up mutual funds or other accounts. Unfortunately, parents who file for bankruptcy often find that the accounts they have established for their child’s education are not protected from the courts and creditors.

Filing for bankruptcy may be the best option for people who are facing serious financial difficulties. It is important to know which types of debts may be discharged and what assets are protected under certain bankruptcy plans. If you or someone you love is considering filing for bankruptcy, consult the Boston bankruptcy attorneys of Joshua Spirn & Associates at 1-800-975-5346 today.

How to Protect College Funds

There are specific accounts parents can set up to protect money set aside for their child’s college education, including:

• Open accounts under the Uniform Gift to Minors Act (UGMA) that may help protect the funds from bankruptcy proceedings
• Open an account under the Uniform Transfers to Minors Act (UTMA) that can also keep the money safe from bankruptcy
• Place money in a protected trust or other type of account in the child’s name.

In such cases, the parent or guardian is allowed to control the accounts until the child reaches the age of eighteen, but the money may still be protected from bankruptcy proceedings. These accounts are typically protected because they do not allow parents or guardians to remove money once it has been transferred.

Contact a Boston Bankruptcy Attorney

If you or someone you love is considering filing for bankruptcy, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346.