Can I keep my children’s college savings fund in a Chapter 7 bankruptcy in Minnesota?

<p>It depends on when you last added to the fund. Under 11 U.S. Code section 529(b)(6), money in a qualified college savings plan is protected from the bankruptcy under certain circumstances:</p><p>1) Money added into the college savings plan within one year before the date you file the bankruptcy cannot be protected. If you file bankruptcy, any money you added into the account within the previous year will have to be given up to the bankruptcy trustee.</p><p>2) Money added into the college savings plan between one year and two years before you file the bankruptcy can be protected up to the first $5,000. If you added $5,000 or less to the college savings plan between one and two years before filing the bankruptcy, you should be able to keep it. If you added more than $5,000 to the college savings plan between one and two years before filing the bankruptcy, you will have to give up any amounts you added over $5,000.</p><p>3) Money added into the college savings plan more than two years before you file for the bankruptcy should be protected from the bankruptcy – you should keep all of it.</p><p>You may also have to give up some or all of the money you deposited into your college savings plan if you deposited that money specifically to keep it out of the bankruptcy. You can only protect money in a college savings plan if that money was put there as an actual plan to save money for college, not just to keep the money out of bankruptcy.</p><p>If you are concerned with whether you could keep money in your college savings plan when you file for bankruptcy, you should consult an attorney. Bankruptcy is a complex process, and there are many things to consider before filing.</p>

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