If your parents are still connected to your financial life or simply involved in your well being, there comes a time when you will need to tell them about your bankruptcy. Needless to say, this can get very awkward. Here are a few tips to help you prepare for that financial talk and learn to not dread it.
Talk with Your Parents Earlier Rather Than Later
Don’t wait to talk with your parents. Yes, admitting financial problems can be embarrassing and of course you don’t want to start a dreaded family argument, but generally don’t wait until you are in the middle of the bankruptcy (when you’ll have to enough to deal with). Talk to them early on, and come into the conversation understanding your choices and the decisions that you have made. Explain what type of bankruptcy you have chosen, whether there will be any effect on your parents, and what your parents can expect in the future regarding your financial circumstances. If it’s going to affect family plans, it’s far better to mention it sooner rather than later.
Explain the Plan
It is up to you how much you will explain to your parents. Possibly they don’t need to know the details – potentially, you may want to give them information on what’s happening and ask for advice. However, your relationship aside, accept that you may have to explain the basics of the bankruptcy plan. Be ready to give an overview of what a Chapter 7 or a Chapter 13 will mean for you, and what your financial requirements will be in the coming years. You don’t want your parents getting any wrong ideas about your situation, and this is a great way to head off assumptions.
Debts You Can’t Discharge
A bankruptcy does not immediately wipe away all debts – there are some debts, especially those associated with the government, that cannot be discharged. Some of these debts may involve your parents or at least be of particular concern to your parents. This includes child support, alimony and student loans, among other types of debt. If you have these debts you will still have to pay them, and it may be a good idea to let your parents know that, too.
Needing Help vs. Wanting Help
Can your parents help out with your bankruptcy? That’s up to you, but it’s often a decision based on wants and needs. If you are getting kicked out of your apartment and need a place to stay, or if your car is getting seized in the bankruptcy and you need to borrow a ride – then it’s a smart idea to ask for some help from your parents if possible, while you are getting back on your feet. Otherwise, the choice is probably based on your relationship, so give this some thought.
The Big Liability Question
Will your bankruptcy affect your parents directly? This is an important question to ask before meeting with them. Generally, your bankruptcy will not affect your parents directly, and will not show up on any of their financial records – in fact, it’s usually a parent bankruptcy that may affect the kids. However, if your parents are also your creditors (if they gave you a loan), then you need to discuss that loan, if it will be discharged, and any new payment plans. Athens lawyers specializing in bankruptcy law can help you out with the details here.
Contact Morgan & Morgan for help answering your bankruptcy questions. Good luck speaking with your parents!
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