Helping Grown Family Members
Taking on an adult family member's debts as your own can be a huge risk and threaten your own financial security. Perhaps the person who needs help is an aging parent, but more often it is an adult child who can't hold down a job and for whom you continue to feel responsibility. It is understandable when parents want to help their adult children, but it is important to remember that you will need extra money and a place to live after retirement. If you live in Alabama and need a financial fresh start, an experienced bankruptcy attorney at Grainger Legal Services may be able to help.Using Chapter 7 or Chapter 13 to Resolve Financial Hardships
Filing for Chapter 7 or Chapter 13 bankruptcy may be the only feasible solution to financial hardship caused by helping grown family members. You should be aware that if you file for bankruptcy, only your debts are going to be discharged at the end of the process. The long-term problem of an adult family member that continues to need financial help can continue to present problems after you file. While creditor harassment may stop with a bankruptcy filing, requests for help from a loved one may continue and may be hard to ignore.
It may be smarter to advise a family member to file for bankruptcy, rather than take on his or her debts and eventually have to file for bankruptcy yourself. Although there may be consequences to that family member's credit report, these consequences are not permanent. Moreover, it is possible that the adult family member could benefit from seeing an attorney, developing a debt repayment plan for Chapter 13 bankruptcy, or learning how to live within a tighter budget.
If you choose to take on a grown family member's debt, it may be wise to consider filing for Chapter 13 bankruptcy. This type of bankruptcy will allow you to reorganize your debts and require you to see an attorney to help you figure out a repayment plan. Chapter 13 bankruptcy can take three to five years before you get a discharge of consumer debt. You will have to make a single monthly payment, and the amount of the payment will be based on your disposable income. If your plan is approved, it is important to stick to the repayment plan and commit to making your monthly payment. This means that you probably won't be able to help grown family members during the life of the plan.
It is important to know that if you have filed for bankruptcy before, this can impact the remedies available to you in this regard in the future. Technically, there is no minimum time before you can file for bankruptcy again, but if you file too soon after receiving a discharge of debts in a previous case, you cannot have your debts discharged. For example, when you receive a Chapter 7 discharge, you can't receive a second discharge for Chapter 7 if the second petition is filed within eight years of the first filing. Similarly, you cannot receive a discharge under Chapter 13 if you file within four years from the date that the Chapter 7 petition was filed. This means that it is important to develop sound spending habits, which may include reduced help to grown family members during the first bankruptcy.Contact an Alabama Bankruptcy Attorney to Discuss Your Options
Dedicated bankruptcy lawyer Chuck Grainger has years of experience evaluating the finances of Alabama clients and helping them through the process of filing for bankruptcy. We serve clients in Montgomery, Prattville, and Troy. Call us at (334) 260-0500 or use our online form to schedule an initial consultation at no cost to you.