Should We Tell Our Kids We are Filing for Bankruptcy?

Discussing finances with your children is hard. Many parents avoid this topic because they feel it is taboo to discuss money and financial issues with their children, sometimes because they do not want the children to worry about the family’s finances and in other cases because they have been conditioned to view these topics as private matters. As a parent, it is your job to set your child up for financial success later in his or her life.

Be honest with your child about the financial struggles you have faced and those you are facing now. You do not have to get into the intimate details of your finances, but telling your child that you are filing for bankruptcy can help him or her understand the changes that are coming to your household.

Your Bankruptcy Will Affect Your Children

Although you might be inclined to hide your bankruptcy, your children will know something is amiss. Instead of letting them become worried by imagining the worst possible scenarios, address the issue head-on with them.

How much information to share about your bankruptcy with your children depends on their ages. With young children, the topic should be approached in the context of how it will affect them. This could mean explaining to your preschooler that the family is moving so you no longer have to spend money on a large house. Older children need more details, but these details should be delivered to reassure them that bankruptcy is a good thing for the family.

Encourage Healthy Financial Habits in Your Children

Use your bankruptcy discussion as an opportunity to discuss healthy financial habits with your children. Talk about saving money, budgeting, and how debt can grow over time. Your children’s ages should determine the complexity of this conversation.

Talk about financial habits in child-relatable terms, like how a child can save money over time to buy a toy he or she wants instead of spending any money he or she receives immediately. Discuss comparing prices between products and looking for value in the purchases they make. You can also open a savings account for your child so he or she can start saving money right away. It is important that you do not try to control your child’s financial decisions; let your child learn from his or her mistakes, rather than shielding him or her from these valuable learning opportunities.

Work With an Experienced Libertyville Bankruptcy Attorney

It is not easy to discuss your bankruptcy with your children, but it is necessary. Before you file for bankruptcy, start working with an experienced bankruptcy lawyer who can give you useful advice and guide you through the bankruptcy process. He or she can also help you start the conversation about your bankruptcy with your children. Contact our team at Newland & Newland, LLP today to set up your initial consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.

(image courtesy of Ilya Yakover)

  • Newland & Newland LLP, Attorneys, Arlington Heights, IL
  • Lawyer.com