<p>my parents are filing for bankruptcy soon. long story short, an employee of my father's lost something very important and now my father is being sued. </p>
<p>how will this effect financial aid? will schools look at this and offer more aid or totally push me aside?</p>
<p>Contact the school ASAP and ask for a Professional Judgment form, as your family's finances have tanked.</p>
<p>I think there will be a difference between his business filing bankruptcy and filing personal bankrupty. It will also matter if his business is incorporated and if his business is being used (which may not end up extending your parents personal property and assets, only the business).</p>
<p>Concur with sybbie here. It really depends on whether it's the business and whether the business is incorporated. If the business is incorporated that bankruptcy has nothing to do with personal finances. That's the reason that people incorporate their business.
Also, if there is a reduction in income due to the business going under that will be reflected in the AGI on the income taxes for the following year. Any Financial Aid already in place for this coming fall will not necessarily be affected depending on the school.
I know I just looked at the UC form for someone and you can't even fill the form out until 16 weeks AFTER the qualifying (bankruptcy, loss of job, etc.) event.</p>
<p>Well if even if the business is incorporated, it's their source of income and if the business goes bankrupt that will certainly affect the family's finances.</p>
<p>Yes but not until that loss of income shows up on the AGI for their taxes. Reduction in income now will not affect EFC for this coming September 2008.
That EFC is based on LAST YEARs income.</p>
<p>That is beyond absurd. This is what happens when the government gets involved in things.</p>
<p>Yes you would have to report the actual AGI. But if there has been a major change in a families financial situation it is possible to ask the financial aid department for a special circumstances adjustment to reflect that change.</p>