How Children Can Be Affected By Bankruptcy

Posted on: 12 April 2017

If you have to declare bankruptcy, you are likely dealing with a decent amount of emotional turmoil. It can be stressful for you to have to figure out how you are going to manage your finances. Bankruptcy can be stressful because your creditors might continue to call you on a regular basis. However, what you might not be thinking about is how your children are going to be affected by bankruptcy. Here are some factors that you will need to consider.

1. Manage Your Children's Emotional State

The first thing that you want to do is look at how your children are coping with the stress of you being stressed out. You might be snapping at your partner or feeling like you have to reduce your spending, which can affect your mood. In order to make sure that your children emerge from you declaring bankruptcy relatively unscathed, you will need to talk to them and reassure them that everything is going to be okay. Frame excess spending, such as going out to eat and other matters, as temporary problems that are not the fault of your children. Be sure that they know that they will be able to live their lives, just a little bit more inexpensively.

2. Think About Your Child's Credit

You might be worried that your bankruptcy is going to affect the credit of your children. This can be tremendously terrifying for you because children do not have bills and other financial obligations that they could use to build credit. You likely know that your children will need credit in order to take out student loans and might not be able to depend on your credit as a result of your bankruptcy. The good news is that, as long as you have never used your children's names to take out a loan or open a credit card, their credit will not be affected by your bankruptcy.

If you have opened credit cards in the names of your children or have them as joint account holders, then you will want to speak to a bankruptcy attorney, such as Thomas A Blake, as soon as possible. It might be possible for you to exclude those particular cards from your bankruptcy and pay them off normally in order to protect the credit of your children. Do not open up credit cards in the names of your children again.

For more information, contact a company that specializes in bankruptcy assistance.