When you file for Chapter 7 or Chapter 13 bankruptcy, one of the most common concerns parents have is whether their children’s bank accounts will be affected. The short answer is: your children’s bank accounts are your children’s assets — not yours.
Children’s Accounts Are Their Assets
Children cannot open bank accounts by themselves, so most parents serve as custodians on the account. But being listed as a custodian does not make the money yours. The funds in the account belong to your child, regardless of whose name is also on the account.
This means your children’s bank accounts are not part of your bankruptcy estate. The trustee cannot use money from your child’s account to pay your creditors.
You Must Disclose the Accounts
Even though your children’s accounts are not part of your estate, you are required to disclose their existence during your bankruptcy filing. The bankruptcy forms ask about all accounts you have an interest in, including custodial accounts.
You will likely need to provide (see our full bankruptcy documents checklist):
- Account statements showing the balance
- Account history for the period leading up to your filing
- Documentation showing the account belongs to your child
Failing to disclose these accounts can raise red flags with the trustee and may be interpreted as an attempt to hide assets.
When the Trustee Might Challenge Ownership
In most cases, children’s accounts are straightforward. But the trustee may look more closely if:
- Large deposits were made shortly before filing — if you moved money into your child’s account right before bankruptcy, the trustee may suspect you were trying to shield assets
- Funds were commingled — if you used your child’s account for your own expenses, the line between your money and your child’s money becomes blurry
- The account was funded with your money — if you deposited your own funds into the account, those portions may be considered part of your estate
An experienced bankruptcy attorney can help you navigate these situations and ensure your children’s accounts are properly documented.
Talk to a Florida Bankruptcy Attorney
If you are filing for bankruptcy and concerned about your children’s financial accounts, the Dellutri Law Group can help. Our experienced bankruptcy attorneys will review your situation and ensure your filing is complete and accurate — from document preparation to protecting your family’s assets.
Call us at 239-939-0900 or schedule a free consultation to discuss your case. We serve clients in Fort Myers, Naples, Port Charlotte, Tampa, and throughout Florida.
