The holidays are the most expensive time of the year for most people. They come right on the heels of other expensive events, from back-to-school shopping and Halloween for those who have children to Thanksgiving with its big food and travel budget. By the time that Christmas, Hanukkah and New Year’s rolls around, the amount that we spend on entertaining and dressing up for holiday parties, traveling to visit family and friends, decorating and gift-giving adds up quickly. And it never seems to end. This is all a challenge for people who are financially stable but it’s a real frustration and source of pain for those who are going through — or about to go through — a bankruptcy.

If you are at the point where your debts are out of control and you are considering filing for bankruptcy, you may be tempted to simply purchase whatever you want for the holidays, thinking that any debt that you run up will simply be discharged once you file. This is a big mistake. For those who don’t qualify for Chapter 7 and have to file for bankruptcy under Chapter 13, your debt will not be waived – instead, it will simply be added to your payment plan, and you’ll have put yourself into an even worse position.  As for those who do qualify for Chapter 7, bankruptcy courts spot this type of accumulation of debt easily and view it as an abuse of the system. You will likely be required to pay or else return all of the things that you purchased.

If you’ve already filed for bankruptcy, then you’re either on a highly restrictive budget tied to your payment plan (under Chapter 13) or have very little disposable income to spend. This means that you are going to have to change your spending habits in order to stay within your means. Spending for the holiday doesn’t have to come to a complete stop, but it does mean imposing discipline on yourself and understanding the difference between want and need. You may also consider speaking to family and friends to come up with a way for you to participate in their celebrations without having to spend money that you simply do not have. Taking advantage of sales and promotions is a good way to cut expenses, and so is setting a budget and sticking to it. Homemade gifts are often appreciated more than those that are store-bought and can save money too.

If you are struggling with debt and need help with filing for bankruptcy, we can help. Contact us today to learn more about the process.