10 Oct Will the Bankruptcy Trustee Take My Child’s College Fund in Kansas?
Is my child’s college fund protected from creditors in bankruptcy in Kansas? Yes and No.
Will the bankruptcy trustee take the money I have been savings for my child’s college education? Yes, if the money is in an ordinary savings account. No, if the money is invested in a Learning Quest account more than two years.
Learning Quest is a 529 education investment program established by the State of Kansas. It is administered by the State Treasurer and managed by private investment companies. A 529 account offers tax deferred earnings growth and other tax advantages.
If you are a Kansas resident and have been saving for your child’s college education in a Learning Quest account, the money in the account is exempt from claims of your or your child’s creditors.
There are two important exceptions to exemption rule:
1) amounts contributed within one year of the date of a bankruptcy petition or the execution of judgment for claims against the account owner, and
2) accounts exceeding $5000 contributed between one and two years before the filing of a bankruptcy or an execution on judgment for claims against the account owner.
Monies covered by these two exceptions are not protected in bankruptcy.
Latest posts by Jill Michaux (see all)
- Last Day to Comment on New Chapter 13 Plan, Petition, Schedules, Means Test, Bankruptcy Rules Changes - February 17, 2014
- Does Chapter 13 Mean Paying All Creditors Back? It Could Be Zero to Unsecured Claims - June 18, 2013
- Random Bankruptcy Audits Stopped - April 24, 2013
- What’s Baseball Got to Do with Bankruptcy? - March 31, 2013
- Bankruptcy Code Dollar Figures Raised 6.3% for Inflation - February 21, 2013