I have cosigned on my son's teen checking account, I am considering filing bankruptcy, Chapter 7, will this affect his credit? 16 Answers as of October 31, 2013

The account has less than $500.00. All monies are his from a job (pay checks) and birthday money. The account is titled a Teen Checking. I have been told the account can be frozen and was advised for him to open another account without me on it. He is 17, and I have not been able to find another bank that will put him on an account by himself. I am worried his credit will be affected.

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Law Office of Thomas C. Phipps | Thomas C Phipps
It won't affect his credit. But he will be the only one responsible for the account.
Answer Applies to: Missouri
Replied: 10/31/2013
Elkington Law
Elkington Law | Sally Elkington
You should disclose the funds in the account in your bankruptcy. Explain that they are your son's account. If you can legally draw on those funds, you should exempt them in order to protect them. The funds, since they are under $500 there is a good chance the funds will not be frozen. If they are, and you have protected the funds, they should be unfrozen. With respect to your son's credit, your bankruptcy should not affect his credit.
Answer Applies to: California
Replied: 9/17/2013
Fears Nachawati | Sean T. Flynn
His credit will not be effected. It is possible that they can freeze the account since your name is on it, however that is not typical.
Answer Applies to: Texas
Replied: 9/17/2013
Stephens Gourley & Bywater | David A. Stephens
It will not affect his credit, but his teen account may be considered to be an asset of your bankruptcy. Most banks will not open accounts for minors without a signature of a responsible guardian.
Answer Applies to: Nevada
Replied: 9/17/2013
Aronoff & Linnell, PLLC | Erik C. Stein
Technically, any asset that you own has to be listed and included in the Bankruptcy petition. This checking account would be listed on Schedule B. As a signer on the account, you have complete access to the funds without your son's permission. You can probably exempt the funds on Schedule C. In Michigan, we would use the Federal Wild Card Exemption (11 USC 522(b)(5)). You could also make the argument that the funds are not yours and that you are on the account for purely administrative reasons. I would be sure to indicate this in the Statement of Financial Affairs.
Answer Applies to: Michigan
Replied: 9/17/2013
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Probably why you were advised to open another account without you is that the account is subject to garnishment and you will have to claim half of it in your bankruptcy. I'm guessing it is a credit union account hence the freezing of the account. I know of no bank or credit union that a minor can open an account on his own. Do you have another relative that could open the account with him?
    Answer Applies to: Michigan
    Replied: 9/17/2013
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Your bankruptcy cannot affect your son's credit. Ask your lawyer about the available exemption to shield the funds on deposit from creditors.
    Answer Applies to: Indiana
    Replied: 9/16/2013
    Rhymer Law Firm
    Rhymer Law Firm | William Rhymer
    It should not be any problem for your son keeping the money as long as none of the money belongs to you. You just need to disclose it in your Chapter 7 Schedules as a custodial account and that you have no equity in the account. It should not affect his credit at all based on the information you have given.
    Answer Applies to: Georgia
    Replied: 9/16/2013
    William Bidwell, Attorney at Law | Bill Bidwell
    Your son's credit will not be affected, but you must report the $500 as an asset in your bankruptcy petition. If no other bank offers "Teen checking," then open a savings account in his name only. The only remaining issue is that a bankruptcy court trustee may argue that the transferred funds are a fraudulent transfer.
    Answer Applies to: Michigan
    Replied: 9/16/2013
    Stuart P Gelberg
    Stuart P Gelberg | Stuart P Gelberg
    His credit will not be affected.
    Answer Applies to: New York
    Replied: 9/16/2013
    The Law Offices of Deborah Ann Stencel | Deborah A. Stencel
    Your joint ownership of his teen account will not affect his credit even if you file bankruptcy. You do need to disclose the existence of the account in your bankruptcy papers to protect the balance from your creditors, however. If this account is located at a Credit Union to which you owe money, there may be an issue, however. Please see an attorney before you file.
    Answer Applies to: Wisconsin
    Replied: 9/16/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You should be able to list your son's bank account under the statement of financial affairs as property held for another. As long as you can show that the money in the account came from your son's paychecks the trustee will not bother with that account. The bank should not freeze the account.
    Answer Applies to: Nevada
    Replied: 9/16/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    No, you can file bankruptcy and list that account as his. It is called a resulting trust. Tell the lawyer that told you it was a problem to look at section 541 of the code.
    Answer Applies to: California
    Replied: 9/16/2013
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    You should retains and hire an attorney to aid you in trying to protect your son's bank balance.
    Answer Applies to: Colorado
    Replied: 9/13/2013
    Mark S Cherry, Attorney at Law, PC
    Mark S Cherry, Attorney at Law, PC | Mark Cherry
    You are entitled to certain exceptions including wildcards. The account may be exempt but it depends on your particular situation.
    Answer Applies to: New Jersey
    Replied: 9/13/2013
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    It will not be, as he is not the one filing. Nor is this even a debt, so its even more insignificant. You're good to go.
    Answer Applies to: California
    Replied: 9/13/2013
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