College Fund

[KCJR]

Hello all-

Sorry to say I'm new here, but here for a reason. Long story short, my credit is shot and my son is in college. I can't get a parent plus loan and have save some cash for his college books etc. How will this effect me?

Thanks
KC

[mountanddo]

More information is needed to answer your question. Are you planning on filing bankruptcy?

[KCJR]

Yes sorry chapter 7, but I have $6000 saved for college books etc.

[btbeme]

How is the money being held? Cash in a coffee can? In a separate account? In a joint acct with your son? Comingled with your other funds?

There are a few things that are off-limits to a Trustee in a Ch 7, but cash usually isn't one of them. So lets start with where it is and go from there.

[KCJR]

We have a few accounts with the same bank to make on line access easier to track and to move money around as needed, one of the accounts is a joint college checking. This is a savings account that I have kept aside for his books/fees. My son doesn't have direct access because I was worried he would not use it for what it is ment to be used for. He has known about "his" money for years and that it is for college. I am very worried that it won't be viewed as "his" for school and it will be sucked into this mess. The thoughts of him losing this because of me losing my job is beyond heartbreaking.

[keepmine]

Since it's in your name then, it's your money. What you intended to use it for isn't important.
As you interview bk lawyers, ask them if your state has enough wildcard exemptions to cover the cash.

[SMinGA2]

If its joint college checking - how is the account set up? You say he doesn't have access, but is name on the account? Is it a minor's account with yourself as guardian? Maybe the better question: whose social security # is used for tax purposes? If its in his name, or jointly in his name, that helps. It means a worst case scenario (I think) of only needing to exempt 1/2 of it.

[keepsmiling]

I hear you, hope you can work something out.
Don't know how much it will help, but we did save a lot of cash by purchasing ds's college books on half.com and other resale sites.
Good luck, keep us posted. Welcome to the forum!

[LadyInTheRed]

KCJR, please make some appointments for free consultations with BK attorneys. They can advise you on whether and how you can protect that money.

[HHM]

Unless this was a UGMA at UTMA (Uniform Gift to Minor, Uniform Transfer to Minor) type account, the money is definitely toast. And even if it is one of those 2 type of accounts, the money is at risk because the issue will turn on when you deposited the funds into the account and where the money came from.

Based on the facts described so far, the only thing to do would be to "spend" the money on the education. It is to late to put the money into a 529 fund (unless you wanted to wait 2 years to file BK).