I have been practicing bankruptcy law in New York and New Jersey for many years. There is nothing more painful than seeing parents worry about debt when they have children to feed, nothing except being that parent.
I do absolutely everything I can to help parents, particularly single parents to get a fresh start. If you are a parent in debt, I strongly encourage you to have a hard look at your finances with a trusted advisor or me or another debt solution expert. Every day that you delay is money that you could have saved for your children’s education and betterment. The other issue is the stress of debt. It is impossible to keep stress from impacting your parenting. You owe it to your family to take action now and do whatever you can to prepare for your child’s future.
Below is a variation of a chart that I used to illustrate how bankruptcy can help people achieve home ownership. The chart below however, relates to creating a college savings plan for your child.
Consider two friends: Each has $30,000 in credit card debt. Until today, both friends have been making minimum payments of $300 per month. Both friends get the money from their family and gifts and overtime that causes a lot of stress in their lives.
Friend One: files bankruptcy today and starts saving her gift money.
Friend Two: does not file bankruptcy and keeps making minimum payments of $300 per month.
Who is going to have a college savings plan for her child?
See the Easy Chart Below To Understand!
Red equals Debt
Green equals Savings
|Today||Six Months||One Year||Two Years||Three Years|
|Bankruptcy (Friend One)||zero||$1800||$3600||$7200||$10,800|
|Non-Bankruptcy (Friend Two)||$30,000||$30,174||$30,360||$30,153||$29,200|
Three years from today:
Friend One who filed bankruptcy has a nice $10,800 saved for her child’s future. More importantly, instead of dealing with debt and being stressed, Friend One had time and peace of mind that made her better able to bond with her child.
Friend Two who did not file bankruptcy still has almost the same debt she started with. Her credit score wont be much better (and possibly will be worse) than Friend One who filed bankruptcy. Her debt is so high that she can never pay it. She just wasted three years and over $10,000. She probably has no savings and the stress of the creditor calls, and payments probably made her less patient with her child.