Can you file for bankruptcy while living at home?
In the years during and since the economic recession, many recent college graduates and other Atlanta young people have found themselves somewhere they likely never thought they would be: back at home, living with their parents. Several factors are behind the recent trend of twenty- and thirty-somethings living at home, namely a high unemployment rate and increasing student loan burdens.
However, just because you have a free or inexpensive place to live does not mean that all of your financial troubles will be automatically solved. For example, if you racked up several thousand dollars in credit card debt during college and are unable to find a job after graduation, you probably won’t able to make those payments. As such, bankruptcy may be a good option for you, allowing you eliminate that debt and make a fresh start.
So what are the potential issues with and ramifications of filing for bankruptcy while living with your parents?
For the most part, living at home does not change the bankruptcy process in any way. You will be asked to repay any debts that you can, and your other obligations will be discharged – with the exception, of course, of student loans, which are nondischargeable in bankruptcy.
Your parents will not be affected by your bankruptcy filing. Their credit score, property and debt will remain intact, with the possible exception of any of your debts on which they have co-signed.
You will still get a living expenditure budget to pay for your living expenses and household items. The court does not expect your parents to allow you to live for free or to feed and clothe you. As such, you will probably be able to move out on your own during the bankruptcy process, if you desire and are able to do so.
Source: Beat My Debt, “Declaring bankruptcy while living with parents,” James Falla, July 9, 2012
At our Georgia bankruptcy firm, we help young people who are dealing with debt as discussed above. To learn more, please visit our bankruptcy page.