Leave Your Debt Problems In The Past. Find Your Fresh Start.

Chapter 13 bankruptcy means getting creative with holiday gifts 

On Behalf of | Nov 24, 2022 | Chapter 13 Bankruptcy

It’s always wise to consider the timing of your filing for bankruptcy. However, if you’re being hounded by creditors and drowning in debt, the sooner you do it, the better you’ll likely feel.  

 Those whose bankruptcy filing precedes or coincides with the holiday season are often concerned that this will have to be the year without Christmas of homemade gifts. That doesn’t have to be the case – but you will face limitations. If you’re filing for Chapter 13 bankruptcy, you will have either a three- or five-year repayment plan. That includes a budget to keep you on track.   

Can you buy holiday gifts if you’re in Chapter 13? 

 You can, but you’ll need to be creative – and start learning to live within your new constraints. For example, you can’t take on new debt unless you’ve gotten approval and it’s for a necessary expense.  

 Any gifts you buy will have to fit into your new budget. The best way to do this is to make them useful gifts. For example, your budget allows purchases of clothing. There’s also a small miscellaneous category. You can buy your kids new coats and shoes or other clothing they need. The miscellaneous category can be used for small gifts – for example, if you or your child needs to bring something for a Secret Santa exchange.  

If you have a large family that’s used to giving (and receiving) individual gifts, suggest doing your own Secret Santa or White Elephant drawing instead. You don’t have to tell them about your bankruptcy. You can just say you’re on a tight budget (if you feel the need to tell them anything). A lot of people are in that spot now.  

Should you wait until after the holidays to file? 

 If you’re waiting so that you can charge all of your gifts on your credit cards before you have to give them up, that won’t work. Your bankruptcy trustee will look back on recent expenditures. Extensive charges to your credit cards just ahead of filing can be considered bankruptcy fraud. That comes with a considerable fine and even potentially jail time.  

Your best course of action is to seek experienced legal guidance. This can help the process go more smoothly and help you avoid costly mistakes.


FindLaw Network