Will declaring personal bankruptcy hurt my child’s application for financial aid when she goes to college?
admin | Mar 30, 2010 | Comments 1
I am one of many about to declare bankruptcy in this economy. I have practically no savings left. My child will try to go to college in a few months on virtually all loans ( I have no money to give her). She is applying for financial bolster and scholarships. Should I try to hold off until after she gets into college before declaring bankruptcy, or does it make any difference in her chance for getting a college loan ? Also, there is an unavoidable split coming as well. Will that hurt or aid her chances of getting more financial bolster ? Would having only a single parent on the application be helpful in getting more grants ?
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Your debt will have nothing to do with her getting federal financial bolster to go to college unless you intended on cosigning a confidential student loan for her, which is a terrible thought anyway since you can’t afford it. Student loans ARE financial bolster by the way.
She can make federal loans without passing a credit check and without a cosigner. Make sure she attends a school she can afford (and more importantly modify) from on her own. Needy freshman can borrow up to 5,500 a year, needy sophomores can borrow up to 6,500 a year and Jr’s and srs can borrow up to 7,500 a year. Be sure she attends schools for less than this and make sure she works to aid support herself and she will be fine.
if her parents are divorced (and have not since remarried) on the day she fills out her next fafsa then she will only have to report the income (not debt) of the parent she has lived with the most in the previous 12 months before she filled out the fafsa. Some people who have to report only one parents income make grants, but some do not. The only way to know for sure is for her to fill out the fafsa and find out.