If I file Arizona bankruptcy will I lose my child’s 529 plan for college?

Probably not. The Arizona bankruptcy laws state that up to $5475 used to purchase a tuition credit or certificate or contributed to an account in accordance with section 529 of the Internal Revenue code is not part of the bankruptcy estate so long as the money was contributed more than one year before the bankruptcy filing and the beneficiary on the account is a child, stepchild, grandchild or step-grandchild for the taxable year in which the funds were contributed.

If you have contributed money to a 529 plan within one year of the date you plan to file bankruptcy you have some options. Postpone your bankruptcy filing if possible. Another option would require the opinion of a competent Tucson bankruptcy attorney. A Tucson bankruptcy trustee will only go after money in a 529 plan if it will provide a meaningful amount of money to the creditors. What constitutes a meaningful amount of money is determined on a case by case basis and considers many factors. One of the major relevant factors in a Tucson bankruptcy case is whether or not the total non-exempt property of the estate is more than $1800. If it is not than even if you have contributed money to a 529 plan within one year of filing bankruptcy than it is probably safe.