Parents of young children are grappling with costs for care that are by-and-large exceeding the cost of their rent and outpacing the cost of college tuition.
Los Angeles Chapter 7 Bankruptcy Attorney Vincent Howard knows that many of these families are also working to pay down their own student loans, get rid of medical bills, perhaps save for a home and set aside some funds for a rainy day.
However, the economic tide is often working against them, as evidenced by a recent report released by Child Care Aware America. Among the alarming 2011 findings:
- In 40 states (including California), the average yearly cost to care for an infant in daycare was 10 percent higher than the median household income for a two-parent home;
- Child care for two children (let's say, an infant and a 4-year-old) in a day care surpassed the yearly median rent payments in every single state;
- In 35 states (including California) the annual cost to care for an infant exceeded a year's worth of tuition and fees at a four-year public university.
It's eye opening in the sense that if you hope to emerge from debt and put yourself on solid financial footing, sometimes the best way to do that is to clear the board. A Chapter 7 bankruptcy does that.
Child care is one of those areas that many parents see as uncompromising. The vast majority of parents are not able to stay at home to care for their children. This is especially true for single parents. At the same time, you don't want to pay less to leave your child with just anyone. Still, some parents feel they have no option, and many are leaving their children in the care of illegal or unlicensed facilities - despite the fact that investigators have revealed serious safety violations and even deaths are more likely with an in-home caretaker than at a larger day care center.
Bankruptcy won't reduce your child care payments (unless it's in the form of debt that you owe), but it will free up your income from your other debt obligations so that you can dedicate the necessary income to making sure your child is well cared-for while you're at work or school.
While the state with the highest percentage of income being funneled toward child care was New York, at 15.9 percent, California is not far behind, at about 14.6 percent.
Overall, this doesn't represent a sharp increase in recent years - only about 2 percent from the year prior. The problem however, is that most people have seen their incomes stay stagnant or even shrink. Promotions and raises at many companies have been halted, while benefits may have been slashed, making workers pick up a larger portion of the tab. All of that eats into that paycheck, and many parents especially are having a tough time making ends meet.
If you're a parent contemplating a Chapter 7 or Chapter 13 bankruptcy, we can help you explore your options.
Los Angeles Bankruptcy Attorney Vincent Howard at HOWARD LAW can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.