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Los Angeles Bankruptcy and CalWorks Debt

By Encino Bankruptcy Attorney on May 18, 2012

Los Angeles bankruptcy lawyers know that sometimes‚ parents can go into debt while helping out their children.

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This may be expected to some extent‚ though some parents end up requiring a Los Angeles bankruptcy if the situation gets out of control.

However‚ for children to be indebted to the government for their parents’ expenses? It had actually been happening much more than you might think‚ particularly in California‚ through a program called CalWorks. It’s a practice that goes back decades‚ but now is slated to end following the settlement of a lawsuit brought on by those who say it’s patently unfair.

The department would essentially go after children‚ even after they’d entered into adulthood‚ for over-payments of social services that had been given to their parents.

In a few of the examples cited:

One was a 73-year-old man who was raising his 14-year-old great-granddaughter. He received little more than $300 a month from the government to help with the very basics. But then last year‚ the CalWorks program docked that payment by 10 percent each month. The reason was because the program mistakenly had sent some $10‚000 to the teen’s grandfather and mother. By docking her monthly assistance‚ they were trying to recover some of that expense.

In another case‚ a Riverside County girl was just 16 when the county gave money to her mother for her brother’s expenses. As it turned out‚ her brother didn’t actually qualify for those expenses. When they couldn’t find her mother to recoup those losses‚ they threatened to take her 2011 tax refund to collect the nearly $800 they were owed. That was money she had been counting on to cover college living expenses during her first year.

And yet another case involved a single mother of three who was struggling to pay her way through college. Officials from Butte County contacted her and threatened to seize her tax return if she didn’t pay the $7‚000 that was collected by her father on her behalf a decade earlier‚ when she lived with various relatives. It took months and many sleepless nights‚ she said‚ to get the mess straightened out.

For many of these children and the family members who care for them‚ they may already be living paycheck-to-paycheck. Forcing them to pay these additional debts on top of their regular expenses may be enough to push these individuals to the brink of a Los Angeles bankruptcy.

Of course‚ this is not to say that a bankruptcy is a bad idea‚ particularly if the debts held prior to the collection demands were significant.

Up until 1996‚ federal law had mandated that public officials go after any member of the household for alleged over-payments. Now‚ however‚ states can decide whether to go after minors if they want. Los Angeles County reports that more than 4‚600 children and nearly 90 adults have been penalized for over-payments.

But the fact that this program is going to stop going after children and people who were children at the time the debt accrued is going to be a huge relief to many of these families.

If you are considering filing for bankruptcy‚ contact San Fernando Valley bankruptcy lawyersat Nader‚ Naraghi & Woodcock to schedule your free consultation. Call (800) 568-0707.

Additional Resources:
California to stop going after children for caregivers’ debts‚ By Alexandra Zavis and Ashley Powers‚ Los Angeles Times


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