Q: I'm the trustee of an elderly parent's irrevocable trust. I need to file for bankruptcy due to medical debt.
Located in Missouri. I have a special needs child, and am being buried in medical debt related to the care of said child. I've talked to a credit counseling agency, and after looking at my income and debts, they determined bankruptcy is my best option.
A:
If your "special needs" child has permanent problems requiring long term or even life long medical treatment, then a bankruptcy is only a temporary band-aid. All medical bills incurred after the date of filing are not included.
Bankruptcy can be a solution, IF, you can find a way to deal with future medical expenses. Caveat: This is a general answer. This may not apply 100% to you, as I know very little about your situation. The trust could be a big factor here.
If you are employed and subject to garnishment, you may be forced into it at some time. Right now, you need to be working on a solution to pay your child's bills.
You really need to make an appointment with a bankruptcy attorney before making a final decision. The counselors are not attorneys, and although they have a lot of knowledge, you should still get a detailed review.
BTW: as trustee (not trustor or grantor), the trust assets are not yours and do not become part of the bankruptcy estate or subject to creditors attempts to collect a judgment. They will when your parents die and if you are beneficiary. Something important for your attorney to take into account.
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