No one has ever said that filing bankruptcy is easy. It becomes necessary for some, yes, but never easy.
You are in the situation to file bankruptcy because your bills have become staggering, and providing for yourself and your family has become a problem. Fortunately, bankruptcy is available to give you a chance to start over financially and get out from under the weight of the bill collection world.
But bankruptcy is also a learning process. It’s tough love. Filing bankruptcy is telling you that what you had been doing in managing your financial affairs hasn’t worked, and it’s time to make changes.
At Steidl and Steinberg, we will discuss your current and future financial situation. We will offer tips on how to avoid making the same mistakes that put you in the position to see us in the first place. If you are filing a Chapter 7, the bankruptcy process is concluded in a matter of months. If you have filed Chapter 13, you will be in a payment plan for as long as five years.
But no matter what chapter you file, the time to make changes is when you walk out of our office after your initial consultation. Here are some things you can do to make the money you have go further, and avoid the pitfalls that brought you to us in the first place.
- Set a budget. Gather information about your income and your expenses. Then write down a monthly average of your income and expenses to see if your budget is balanced. If you are spending more than you make you will need to make changes to your spending habit which leads to. . . .
- Change your ways. If nothing changes, nothing changes. It’s great to have movie channels and NFL Sunday Ticket on your satellite or cable bill, but if you can’t balance your budget, these are items you need to cut. Look at the luxuries first. You will probably find areas where you can scale back or even eliminate and not even notice a difference in your life. Instead of buying your lunch every day, pack it. Buy bus or car parking passes instead of paying more expensive daily rates, or carpool if possible to share transportation costs. Plan your trips to save gas. Fix dripping faucets. Turn out lights. Turn down your thermostat in the winter. Every penny and every action counts.
- Be aware of good deals. Watch the ads for supermarket specials, take the coupons you clip, and only buy the items that are on sale. Try store brand food, you will be surprised at the quality of most products. Instead of paying top dollar for clothing, take a look at thrift stores, where you can get four pair of pants for the price of one. Many times the clothing in a thrift store will still have the price tag on it and you will be surprised what you can find at a thrift store. Who knows where you bought the clothes you are wearing? And who cares? Also, give estate auctions a try. Auctions are fun and the values are amazing. I opened the bidding for a room air conditioner that appeared to be brand new for $15.00. No one else made a bid. The A/C unit has worked flawlessly now for three years.
Changing old spending habits are tough. It’s like trying to lose weight. You get excited and do well for a short period of time, and then slip back into old habits. But you literally cannot afford to fall back into old habits.
Bankruptcy will help to take care of mistakes that were made in the past. But it is also a wake-up call to take the time to plan your future. Set your budget, make changes, and look for good deals.