It’s the holiday season which means time spent with loved ones, presents, and traveling. There is no denying that the holidays can be expensive – here are our tips on how to survive the holidays if you’ve declared bankruptcy.
Tips For Staying Financially Safe During The Holidays
If you’re wondering how you’ll be able to give gifts and have fun during the holidays, consider the following financial tips:
- Start an automatic savings account in advance: Some banks offer an automatic savings program that will round up on every dollar spent. This is a nice way to save a little money without even thinking about it. Or you can set up an automatic transfer into a savings account. As little as $5 – $10 week can create a nice financial cushion in a short period of time.
- Consider giving homemade gifts: Do you have any talent for art, woodworking, or even a hobby like knitting? Not every gift needs to be expensive and often, the best gifts are those made with love. Consider using your own unique talents to make gifts for your loved ones this year.
- Ask your family to do a secret Santa: Instead of giving gifts to every single person, consider doing a secret Santa. This way, everyone will receive something but no one will feel financially strained. You can even suggest placing a spending cap on gifts.
- Use coupons and shop sales: Do your research before making any purchases.
You May Be Able To Modify Your Chapter 13 Repayment Plan
In some cases, it may be possible to modify a Chapter 13 repayment plan so that less is paid over a month or two. This means more money is available for the holiday season.
However, consider this before you decide to move forward with a modification:
- In order to make the modification your bankruptcy attorney will need to file paperwork – and legal fees will apply.
- Future monthly payments will be higher until the final payment.
When taking these facts into consideration, modifying the repayment plan may not be the best option.
What Happens If I Receive Cash For The Holidays?
If you get cash as a gift for the holidays you may be wondering if you need to report this gift. If you’ve already filed for bankruptcy, cash gifts will not be factored into the means test and will not impact whether Chapter 7 or Chapter 13 is the better choice for your situation.
The same process applies to holiday bonuses from work. If you’ve already gone through the process of filing for bankruptcy, the holiday bonus from your employer will not impact any of this. However, if you’ve not yet filed, this bonus might be considered part of your earned income.
Remember – It’s Important To Not Take On Additional Debt
When you’ve filed for bankruptcy, part of the arrangements made is the agreement that no additional debts will be taken on. While it can be difficult to abstain from using credit cards during the holidays, the decision to say on course is a good one and will help you get your finances back on track.
Have A Happy And Safe Holiday
However you and your loved ones choose to celebrate, please be sure to have happy holidays and safe travels.