While holidays can be a time full of a fun and magic, they can also feel like a time of stress and worry if you are in a difficult spot financially, or you are currently working through a Chapter 13 Bankruptcy. A Chapter 13 bankruptcy is a repayment plan, created to repay a portion of your debts over the course of 3 to 5 years. If you are right in the middle of a your repayment plan, you may be concerned about how to handle the holiday season and if gift giving is even possible. First, it is important to understand how a Chapter 13 payment plan works, then you can see how gift giving and holiday celebrations may still be a possibility.
Chapter 13 Repayment Plans
In a Chapter 13 bankruptcy, the debtor creates a debt repayment plan to pay back their creditors. With this type of bankruptcy, the debtor gets to keep their assets and all debts are rolled up into one monthly payment the debtor makes to the bankruptcy trustee. The trustee then distributes the payment among the creditors.
To make your repayment plan payments, you use your disposable income. Disposable income is calculated by taking your estimated monthly income and subtracting your monthly expenses. With your disposable income going to your repayment plan payment, it can feel tight if you are trying to fit gift giving or other holiday expenses into your budget.
Handling the Holidays During Bankruptcy
So, what can you do when the Holidays roll around and you are currently sending your disposable income to a Chapter 13 repayment plan? The best answer to this question is: plan ahead.
Even during a Chapter 13 bankruptcy, you will get to count food and even modest entertainment expenses as a part of your monthly expenses. One option is to try to save a small portion of your income ($5-$10 a week) during the year so you can have a small holiday fund by the end of the year. By doing so, you can use this saved money for holiday treats or gifts.
Another idea to consider is giving handmade or homecooked gifts for the holidays. Using your monthly budget to get the ingredients for a holiday treat or buy the materials for a handmade gift can be appropriate as long as your spending isn’t excessive.
Get Your Chapter 13 Questions Answered
The holidays can be tricky when finances are tight while you work through your chapter 13 bankruptcy. But, just remember, when you stick to your plan you are working to achieve a more secure financial future and by preparing ahead of time you can still make the holidays special and fun.
If you are facing a serious financial situation and would like to see how a Chapter 13 bankruptcy can help in your case, it is important to talk to a skilled Georgia bankruptcy attorney. At the Ballard Law Group we can help you understand how bankruptcy could benefit your situation, even during the holiday season. Additionally, if you have questions about your current Chapter 13 bankruptcy or need to modify your repayment plan in any way, we will work to provide the assistance you need. Contact us today at 404-220-9906!