Bankruptcy And The Holidays: What To Consider
As the holiday season approaches, if you are considering the possibility of filing for personal bankruptcy, it is critical to keep certain considerations in mind as you buy gifts for others and make plans for holiday travel. Nobody wants to file for bankruptcy during or after the holiday season, and it can be a difficult decision to make. However, bankruptcy may be necessary, and actions you take during the holidays ultimately could impact your bankruptcy case. The following are some tips and considerations about bankruptcy and the holidays from our bankruptcy lawyers in West Palm Beach.
Avoid Putting More Debt on Your Credit Cards
It is essential to avoid taking on more unnecessary debt during the holidays, especially new debt by making charges on your credit card. You might be thinking that you can purchase gifts or book holiday travel by using your credit card, and you may be assuming that this debt can be discharged if you are planning to file for Chapter 7 bankruptcy. However, it is critical for you to know that not only may this debt be nondischargeable in your bankruptcy case, but it could also result in allegations of bankruptcy fraud.
Under the U.S. Bankruptcy Code, the purchase of any luxury goods or services on your credit card that total more than $800 in the 90 days prior to your bankruptcy filing will be considered fraudulent. You should know that the term “luxury goods and services” does not refer only to high-value items that you might associate with wealth or leisure. Rather, any purchases that cannot be considered “necessary” will fall into this category. To be clear, holiday gifts, holiday travel, and any other related expenses are not necessary and could result in serious problems in your bankruptcy case.
Find Ways to Limit Spending and Stick to Your Budget
To avoid any unnecessary spending, it is important to consider innovative ways of limiting your spending during the holidays. For example, you might consider a “Secret Santa” gift swap with family members rather than purchasing an individual gift for everyone. Or you might set a strict dollar limit on gifts at a reasonable amount of $20 per person. It is important to avoid spending where you can, and plans to file for bankruptcy might mean that you cannot travel for the holidays this year. Make a budget for yourself once you know what you will need to spend, and stick to it.
It may be a difficult conversation to have, but you may need to tell your family about your finances and your plans for bankruptcy to emphasize that you need to limit spending this year accordingly.
Contact a West Palm Beach Bankruptcy Attorney
Whether you are ready to file for bankruptcy or you are considering bankruptcy after the holidays, it is critical to seek advice from a lawyer who can answer your questions and assist you throughout the bankruptcy process. One of the experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton, Kaplan & Eller can talk with you today about the particular facts of your case and what you need to do during the holiday season in relation to your bankruptcy plans.