Bankruptcy as a Single Parent
Being a single parent is hard. Not only do you have to make all of the parenting decisions yourself, but you need to pay for everyday expenses without the benefit of another person’s income. Even if you are receiving child support, chances are the other parent is sometimes late with support—or in arrears altogether.
Fortunately, the bankruptcy code lets all consumers hit the “reset” button on their finances. As a single mom or dad, consider the following to decide whether bankruptcy is right for you.
Bankruptcy Does not Affect Your Ability to Receive Child Support
The purpose of child support is contained in its name—to support the child. Your own financial difficulties should not impact whether or not you receive child support. Child support is not spousal support (alimony), which is intended to mitigate the financial unfairness of a divorce. Because you file for bankruptcy, you are not relieving the other parent of his or her obligation to pay child support.
A Chapter 7 Bankruptcy Can Quickly Eliminate Many Debts
This type of bankruptcy, also called a liquidation, is appropriate for people who do not have many assets but have unsecured debts like:
- Credit card debt
- Medical debt
- Personal loans
- Certain court judgments
From start to finish, our clients can complete a Chapter 7 in a few months. Unfortunately, as a result of filing for Chapter 7 protection, the trustee might need to sell some of your property, such as your car or your home. Helpfully, Florida law provides many exemptions for property, so most people can protect their largest assets. As a result, they wipe out most of their debts, which provides them with necessary breathing room. Meet with a bankruptcy attorney to discuss your situation.
Bankruptcy Will Stay on Your Credit Report
Are you considering remarriage? Do you want to take out a home mortgage with your new spouse? If so, a bankruptcy could impede your future financial goals. If you file for Chapter 7, then the bankruptcy will stay on your record for 10 years, making it harder for you to obtain a mortgage in your name. Of course, your new spouse could apply for the mortgage by him or herself, but your income will not be included in the loan application.
When you meet with your bankruptcy attorney, discuss your future goals. Nobody knows exactly what the future will hold, but it might make sense to delay bankruptcy protection if you anticipate needing a loan in the near term.
Financial Freedom is Priceless
It’s stressful being a single parent. Add communications from collection agents on top of your daily responsibilities and you probably need a vacation from your life.
Although bankruptcy will not make all of your troubles go away, it can provide you with a new financial start. To discuss your options, please contact one of the South Florida bankruptcy attorneys at Nowack & Olson today. With offices located in Plantation, Doral, Boca Raton, and Jupiter, we are never far away. Call or submit an online request.
Resource:
myfico.com/crediteducation/questions/Negative-Items-On-Credit-Report-Chapter-7-13.aspx
