It seems like everyone is in debt these days and you are never too young to have that kind of a burden on your shoulders. Sometimes debt piles up so high that debt settlement or bankruptcy seem to be the only options. There are requirements for declaring bankruptcy, however, that may not make that option available to everyone.
What determines “minor” status?
A minor is typically a person who is under eighteen (18). Of course, people under eighteen (18) can still be considered adults by law if they are married, emancipated by the court, or join the military.1 An emancipated minor is one who is sixteen (16) or older who applies to the court to be free from his or her parents.2 Minors who are emancipated can be required to pay back any debt they have accumulated.3
Can a minor declare bankruptcy?
Whether or not a minor can declare bankruptcy depends on the state you declare bankruptcy in and what type of debt the minor has accumulated. Many states have capacity requirements for you to file bankruptcy. You will find that in order to do most things, such as obtain a credit card, you have to be eighteen (18) or over. Those who are under eighteen (18) typically cannot pile on too much debt because of the age requirements for many debt instruments such as loans and credit cards. If you do not have too much debt piled up against you then there really is not a need to declare bankruptcy.
However, there is not an age limit when it comes to receiving federal student loans, which come with high interest rates.4 The problem with student loans is most of them are not dischargeable by bankruptcy. Minors may be able to gather more debt if their parents or another adult co-signs the debt.5 In this same vein of thought, if a minor is considered as lacking the capacity to file for bankruptcy, he or she may be able to still file through a guardian ad litem or a conservator.6
In Arizona, in order to file under a Chapter 7 bankruptcy there are several requirements that do not address age. You have to be an individual, partnership, corporation, or other business entity that qualifies under the means test (where your income must be below a certain level depending on your family size).7 An individual debtor can then discharge debts through Chapter 7 bankruptcy.8 It is unlikely that a minor will have a corporation or partnership, so he or she should be able to qualify for a debt discharge. Similarly, Chapter 13 bankruptcy is available for an individual as long as the individual’s unsecured debts are less than $383, 175 and secured debts are less than $1,149,525 in federal court. 11 U.S.C. A� 109(e). There are other requirements for Chapter 13 and Chapter 7 bankruptcy that relate to procedure, such as how long you have to wait before filing another bankruptcy.
While it is probably not common for someone under eighteen (18) to be in the position to need to file bankruptcy, it may happen. No matter what your age is, if you are considering filing for bankruptcy you should contact an experienced bankruptcy attorney who can help you navigate your personal situation.
For more information contact an experienced bankruptcy lawyer in Phoenix at Ariano & Reppucci, PLLC.
[1] Michelle Diane, Are Children Responsible For Debt Incurred While They Are Minors?, classroom.synonym.com, http://classroom.synonym.com/children-responsible-debt-incurred-minors-20965.html (last visited Dec. 15, 2014).
2 Emancipation of a Minor, azcourts.gov, http://www.azcourts.gov/selfservicecenter/SelfServiceForms/EmancipationofaMinor.aspx (last visited Dec. 15, 2014).
3 Michelle Diane, supra note 1.
4 See Worried You Won’t Be Able To Get Aid? Most People Are Eligible For Financial Aid For College Or Career School, studentaid.ed.gov, https://studentaid.ed.gov/eligibility (last visited Dec. 15, 2014).
5 See Are Minors Responsible For Their Credit Card Debts?, consumerist.com (Mar. 14, 2007), http://consumerist.com/2007/03/14/are-minors-responsible-for-their-credit-card-debts/.
6 Andrew Mansfield, Bankrutpcy and Minors, Incompetents, And Those For Whom You Have Power Of Attorney, avvo.com, http://www.avvo.com/legal-guides/ugc/bankruptcy-and-minors-incompetents-and-those-for-whom-you-have-power-of-attorney (last visited Dec. 15, 2014).
7 Liquidation Under Bankruptcy, uscourts.gov, http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx (last visited Dec. 18, 2014).
8 Id.
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