Will Chapter 13 Bankruptcy Impact Your Child’s College Plans or Future?

If you’re thinking about getting out of debt, you may be worried about navigating Chapter 13 bankruptcy and your child’s future.

At our bankruptcy firm, parents sometimes ask us whether filing Chapter 13 will affect their child’s ability to go to college, get financial aid, or even find a job later in life.

Fortunately, your child’s future remains open and full of possibility.

Here’s what you need to know.

Bankruptcy and Your Child’s Credit Report

Personal bankruptcy is personal — meaning it affects only the person who files.

So your Chapter 13 won’t show up on your child’s credit report. It won’t affect their credit score, their ability to get loans, or their financial reputation.

Your child keeps a clean financial slate, while you get the opportunity for a fresh start.

Will Chapter 13 Affect Your Child’s Ability to Get Student Loans?

Federal student loans aren’t credit-based, so bankruptcy won’t stop your child from qualifying for federal financial aid, including:

  • Pell Grants
  • FAFSA-based loans
  • Work-study programs

Your child can still attend college, apply for aid, and receive assistance just like anyone else.

However, if you were planning to help pay for college out of pocket, you may need to adjust how that support happens while you’re in your repayment plan. Chapter 13 reorganizes your budget, so large financial gifts or tuition payments may not be an option. But you can still support your child in other critical ways, including planning, guidance, and emotional encouragement.

You should also consider how you can guide your child through decisions around debt. Student loans can be a really dangerous undertaking. By filing Chapter 13 and walking your child through the process, you can teach them the importance of handling debt wisely.

What About Parent PLUS Loans?

Parent PLUS loans do look at your credit, but a past bankruptcy won’t automatically disqualify you. If your Chapter 13 is completed or discharged, you may still be eligible. Even during your plan, some families choose alternate arrangements:

  • The student takes out federal loans in their own name
  • The student applies for scholarships or grants
  • A co-signer may help later when credit has improved

There are many paths to paying for school — Chapter 13 doesn’t close the door.

Generally, though, I advise families in this situation to be very careful about taking out debt for college.

We’ve written a lot about student loans, which aren’t dischargeable through bankruptcy. Student debt can make a very long-term impact on your child’s financial life. So take real care in making those commitments, especially in their name.

College Applications and Scholarships

Your bankruptcy is not part of your child’s academic record. Colleges don’t ask about a parent’s bankruptcy when reviewing:

  • Admissions applications
  • Scholarships
  • Housing forms

Your child’s opportunities remain based on their own hard work, not your financial struggles.

How Chapter 13 Can Actually Help Your Child’s Future

This part often surprises people, but we’ve seen Chapter 13 make a big difference for families. Filing Chapter 13 can create more stability for your child by helping you:

  • Keep your home
  • Keep your car
  • Catch up on important bills
  • Reduce financial stress in the home

A stable, steady household is one of the best gifts you can give your child, at any age. And showing your child how to face financial difficulties responsibly can be a powerful life lesson in resilience.

Chapter 13 Bankruptcy and Your Child: Building a Future Together

Sometimes parents feel shame when they’re struggling financially, but asking for help isn’t failure. In fact, it can be a step toward protecting your family.

Chapter 13 is designed to help you get back on track and get the fresh start you need to build a stable future.

If you have questions about how Chapter 13 may affect your family, we’re here to listen. Our award-winning attorneys are known for their compassion, patience, and personalized guidance.

Contact us today online or call us at 901-327-2100 for a free consultation. We’ll walk with you through every step so you can move forward with hope and stability.