Chapter 13 bankruptcy involves following a strict repayment plan for a few years. At the end of your repayment plan, the remainder of your debts can be discharged. In the meantime, it’s very important that you stick closely to your budget. Many people who file for bankruptcy find it helpful to discuss the financial aspects of special occasions before proposing their repayment plan. Your bankruptcy attorney can offer further guidance.
Identify Special Occasions
Since your budget for special occasions will need to be integrated with your repayment plan proposal, you’ll need to identify all of your family’s special occasions for the year. Get out your calendar and mark off dates for birthdays and holidays. Consider whether your budget will be affected by graduations, anniversaries, or back to school shopping. Your family may agree to do without spending to celebrate certain occasions, such as Mother’s Day and Father’s Day. On days such as these, spending time together as a family is its own reward.
Set a Spending Limit
Determine the maximum amount of money you’re comfortable spending for each type of special occasion. Add up the total amount this will equal for one year and then divide by 12 months. Your budget during the Chapter 13 repayment plan should include a monthly amount to set aside as a special occasion allowance.
Since you’ll likely be spending less than what you’re accustomed to for special occasions, you’ll need to think creatively when planning your celebrations. Check consignment shops for back to school clothing and dollar stores for great deals on school supplies. When you plan birthday celebrations, put the emphasis on meaningful experiences that don’t cost a lot of money. You could take the kids out for a game of mini golf and give the birthday girl or boy one or two inexpensive gifts. During the holidays, put together your own gift baskets to give to family and friends. Fill them with homemade treats or fancy soaps and lotions.
At Cutler & Associates, Ltd., our team of experienced bankruptcy attorneys can answer any questions you may have about bankruptcy and the Chapter 13 repayment plan.