Question: I loaned money to my grandchildren so they could pay off some bills and start a business. I didn't think they'd ask me for money more than once. I gave them the money and a few months later my grandson and granddaughter came back and said they needed more money. I gave them more.
All of that caused me to become overextended and now I think I may have to explore filing for bankruptcy. I never thought I would have to go bankrupt, but that might be my best option. I'm struggling to pay the mortgage and my car note.
I loaned the grandkids over $200,000. I got a personal loan and I used credit cards to get them the money. I had some savings from my years at the Fulton County school system that I used. But now, since they haven't repaid any of the funds, I'm short of cash each month. That's why I'm looking at filing.
I want to know that I can file because I made some stupid loans to relatives. I regret loaning them money and I suspected that I wouldn't be paid back in full. But I thought I'd get something back. I haven't gotten anything.
Since I loaned money to relatives, can I still file bankruptcy?
J.N. in Roswell, GA
Answer: Since you used your credit cards and took a personal loan, you should be able to get rid of those debts either through a chapter 7 or a chapter 13. The fact that the funds were utilized to help relatives pay-off debt and to start a business will not prevent you from filing bankruptcy.
We have had many clients who have used their credit and savings to assist family members. We have clients who have aided family members in starting a business, with legal fees, in paying for a house or even assisting them with rehab for drugs or alcohol. We see family members helping each other frequently. All of these things, of course, can lead to high debt levels.
Too much debt? Time to get some real relief?
Attorneys Bill Sherman and Valerie Sherman and the team at the Sherman Law Group will help you navigate the entire bankruptcy system, from beginning to end. We proudly serve the entire Atlanta metro area and North Georgia.