Will Bankruptcy Affect Your Children? What You Need to Know
Anyone can suddenly discover their debt has overtaken their ability to repay their bills. Many people have more than their credit to worry about when they decide to file bankruptcy. Parents that avoid the process often do so because they believe the filing could make life difficult for their children. Bankruptcy may cause complications, but it does not have to end any dreams.
Student Loan Applications
Students have the same access to financial aid after a parent files bankruptcy because grants, scholarships, and federal loans do not rely on credit scores for approval. The difficulty arises if the parents hoped to co-sign a personal loan or take out a PLUS (Parent Loan for Undergraduate Students) loan. The expected family contribution may also be higher due to bankruptcy.