Does Bankruptcy Affect Children?

           


         I will start off by saying that I am abnormally qualified to answer this question.  Not only am I a bankruptcy attorney with Halcomb Singler, LLP, but I was 8 or 9 when my own father filed for bankruptcy.  Part of the reason I very much enjoy my practice is that I am able to take stress off of peoples' shoulders that has been crushing them for months or even years.  I believe I am able to identify with the position they are in because I lived through my father's bankruptcy as a child.

             Every child is different and it has been almost 25 years since my experience....so take from this what you will, but I felt like sharing my experience might be able to help some people facing bankruptcy.  As a child I did understand that my family was dealing with financial difficulty.  I specifically recall that we were scheduled to take a vacation, which was abruptly cancelled the day before we were to leave because a business owned by my father and his family members had failed.  My father and some of our other family members signed a personal guaranty on bank loans that added up to millions of dollars.  At the time it happened I had no idea how much was owed nor did I have any idea of the amount of stress mounting on my parents up until that day.  I seriously only knew that we weren't going on vacation because Dad's business wasn't doing well.

            After the initial announcement we weren't going on vacation I do not remember much else at all about the fact that my father filed for bankruptcy.  However, I do remember how stressed out he seemed prior to that time.  I do remember being concerned for my father's well-being because he seemed so stressed out and on edge.  And I also remember that he seemed depressed because he was not able to pay back the loans and because the business had failed.

            While I do recall being concerned about my father, I don't remember feeling like there was a big financial difference for our family.  I actually didn't even notice it if I got less school clothes or if I didn't get as many Christmas gifts for several years (this may or may not have happened.....I seriously don't remember).  I also recall that we didn't go out to eat after that time for a long, long time....but I wasn't bothered by that fact.

            I also remember that at some point after the bankruptcy was over my father seemed much less stressed out than he had been prior to the bankruptcy.  I remember that I was able to get to see my father more because he wasn't working all the time trying to save his failing business.  I was also never embarrassed that my father had filed bankruptcy.  

           So, for what it is worth I don't feel like I was scarred as a child because my father filed bankruptcy.  If anything, my father filing bankruptcy actually improved my life because I got to see my father more often and my parents had a better relationship after the financial strain had been extinguished.  I know I have met with some clients who are very concerned about the impact bankruptcy will have on their children.  This is especially true if the family is going to surrender their home in bankruptcy, which will require the family to move.  But in my opinion your children don't really understand what bankruptcy means. If they are anything like I was as a child what will stick with them is whether or not their parents are happy and not how big the budget is for entertainment, new school clothes or holiday celebrations.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.