There are minimum ages that are milestones as you go through life. Typically, age 16 means a driver’s license; age 18 means you can vote; age 21 means you can purchase alcohol; age 35 means you can be elected President of the United States (like your kindergarten teacher predicted for you); and age 65 means you receive Social Security retirement benefits (or age 62, or 66, or 67, or never if the government runs out of money).
While the government places age restrictions on many activities, there is no minimum age requirement for an individual to qualify as a debtor in a federal bankruptcy proceeding.
This “loophole” was used in 1998 to stop a foreclosure. In that case, 10 year old Shawn Powell filed for Chapter 13 bankruptcy protection in a Maryland bankruptcy court. The facts of the case are actually very sad: Shawn, his brother and his sister were orphaned in 1998 after his father died of liver disease; almost exactly a year after their mother died in a car accident. Shawn and his brother lived in his parent’s home with his uncle, who was not able to keep up the mortgage. Faced with foreclosure, Shawn filed for bankruptcy protection.
According to a Washington Post story at that time, the purpose of Shawn’s bankruptcy was to buy time for “the children to collect $100,000 from their father’s life insurance policy, which would allow them to pay what they owe and stay in the well-kept home.” Shawn’s bankruptcy filing lists his personal property: toys and clothes valued at $200. Shawn’s income, needed for funding a Chapter 13 repayment plan, was disclosed at $327 a month in Social Security survivor benefits.
Ultimately, Shawn’s bankruptcy was dismissed in March, 1999 – by Shawn. After filing, Shawn became the subject of media interest. He was interviewed by newspaper and television reporters including Barbara Walters and Montel Williams. Shawn and his family received donations in excess of $34,000. Even the mortgage company found a heart and agreed to stop the foreclosure proceeding while the insurance issue was being resolved.
Bankruptcy can be a lifeline, a second chance, and even provide additional time to restructure personal finances. Bankruptcy is protection for everyone, regardless of age.
If you are considering filing for bankruptcy please call the experienced attorneys at Fears Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.