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A 529 Plan is also known as a qualified tuition plan for college purposes.  Monies used to fund a 529 Plan grow on a tax free basis so long as upon withdraw the principal plus any growth are used for educational purposes only.  In accordance with the applicable Consumer Bankruptcy Statute, 11 USC Section 541(b)(6) monetary contributions to a 529 Plan within one year of filing the Bankruptcy would be property of the bankruptcy estate.  Funds contributed in excess of $5,000 between one and two years of filing a Consumer Bankruptcy would be property of the bankruptcy estate.  Any funds contributed over two years before the bankruptcy is filed would not be made part of the bankruptcy estate without limitation.   Since there is no limitation after only a two year look back from the date of a bankruptcy filing, the bankruptcy code is relatively favorable regarding college savings in the form of 529 Plans.   I hope this blog post was helpful.

To speak to an attorney at Sadek and Cooper Law Offices regarding your situation and the best options available to you, please contact one of our offices listed below.

CENTER CITY PHILADELPHIA: 1315 Walnut Street, #502 Phila., PA 19107                            215-545-0008

NORTHEAST PHILADELPHIA: 2375 Woodward Street, #105 Phila., PA 19115                        215-545-0009

DELAWARE COUNTY OFFICE: 1489 Baltimore Pike, #218, Springfield, PA 19064                610-432-3111

BUCKS COUNTY OFFICE: 1609 Woodbourne Road, Suite 203B, Levittown, PA 19057          215-545-1055

NEW JERSEY OFFICE: 302 Washington Avenue, Suite 101 West, Moorestown, NJ 08057   215-545-0008