For a lot of people in North Carolina and throughout the country, it’s been a tough year financially. If you’re among them and you’re considering filing for bankruptcy to help get a fresh start in the new year, you’re not alone.
Dealing with a bankruptcy near the end of the year can have unique challenges. Among them is the fact that for most people, the holidays mean more spending. People often feel required to spend money on decorations, holiday baking, entertaining and of course gifts. How can filing for bankruptcy affect this reality?
Using your credit cards
First, it’s critical to watch your spending in the lead-up to your bankruptcy filing. If you buy your gifts (or any non-essentials) with your credit cards knowing that you don’t have the money to pay off the cards, the bankruptcy court can consider that to be fraud. This could result in a hefty fine and even jail time.
Aside from the potential legal ramifications, continuing to spend money on anything you don’t need when you’re already overwhelmed by debt is just going to make the process more challenging. It’s critical not just to watch your credit card spending, but your cash spending as well. It’s important to have some money in your bank accounts as you begin the bankruptcy process.
Creative gift giving solutions
Certainly, the bankruptcy courts don’t prohibit people from making reasonable gift purchases they can afford. It’s smart to gift family members things that can be considered necessities, like clothing and items that double as school or work supplies.
For people outside your immediate family, you can be more creative. That can include homemade gifts, regifting things you’ve never used or offering “services” like a day or two of pet sitting or doing something for which you have a talent or skill.
It’s perfectly acceptable to simply tell people that you’re cutting back on gift giving this year since “money’s tight” and “everything is just too expensive now.” Most everyone can relate to that. If you have a large family or friend group, suggest doing a Secret Santa drawing so everyone only has to buy one gift.
By getting early and experienced legal guidance if you’re considering filing for bankruptcy, you can help avoid costly missteps that can derail your plan to start the new year on more solid financial footing.
