We are seeing an increasing number of younger clients come in for free consultations and ask if they are old enough to file for bankruptcy. While there are government-set age limits for driving, voting, and drinking, you may be surprised to learn that there is no age restriction for bankruptcy.
In fact, the absence of an age limit for bankruptcy made the news back in 1998 when a 10-year-old in Maryland filed for Chapter 13 bankruptcy. Yes, you read that correctly – a 10-year-old filed for bankruptcy.
It’s actually an incredibly sad story. 10-year-old Shawn Powell, his younger brother, and sister became orphans after their father died of liver disease – their mother had died a year before in a car accident. Their uncle moved into their parents’ home to take care of them but was not able to maintain payments on the mortgage, and they were faced with foreclosure.
The Washington Post wrote a story during the proceedings, explaining that Shawn filed for bankruptcy to delay the foreclosure so that he and his siblings could collect $100,000 from their father’s life insurance policy. Once they had the insurance payout, they would be able to pay what they owed and keep the family home.
The bankruptcy filing listed all of Shawn’s personal property: clothes and toys valued at a total of $200. Since Shawn was filing for Chapter 13, he had to disclose his income, which was only $327 in monthly Social Security survivor benefits.
In the end, Shawn dismissed his own bankruptcy in 1999. The media jumped on the story when Shawn filed, and he was interviewed by multiple reporters, including Montel Williams and Barbara Walters. The public rallied to the Powell children’s cause and donated over $34,000. After the media attention, the mortgage company agreed to delay the foreclosure until the insurance payment was received.
Bankruptcy is meant to give people second chances, regardless of age
Regardless of your age, bankruptcy can give you a second chance in life. Depending on your personal situation, bankruptcy can either erase most of your debts or provide the time you need to restructure your finances and catch up on debts.
It does not take much to tip the balance and cause spiraling, out-of-control debt. The sudden loss of a job, sudden reduction of pay, a car accident, an unexpected medical bill – there are countless occurrences that can cause even the most frugal person to fall behind on bills. Once you fall behind, it’s often difficult (or even impossible) to catch up – and that is why the US government created bankruptcy laws.
If you are faced with an impending foreclosure or struggling with overwhelming debt, call us today at 214-760-7777 for a free consultation. We’ll walk you through your options, so you understand how bankruptcy works and how it can help. We want to help you make the best decision for a better future.