When filing for bankruptcy, regardless of whether you are pursuing a Chapter 7 or a Chapter 13 filing, one of the first things your attorney will assist you with is creating a budget that will be filed with the court. This budget serves several purposes related to the bankruptcy, including determining the size of the payments that would be made in a Chapter 13 filing and helping to demonstrate eligibility for a Chapter 7 filing when viewed in conjunction with projected income.
The budget in a Chapter 13 filing is especially significant as it helps demonstrate what a feasible plan payment looks like in real terms, both to the trustee’s office and the court. Your real and specific financial circumstances should heavily influence a Chapter 13 payment, and building a budget is a crucial and tremendously helpful step in pursuing this process. In speaking with your attorney, they will work to synthesize and assemble this budget based on your expenses so that it is specifically tailored to ensure that all of your financial needs are comfortably met while pursuing a Chapter 13 filing.
Outside of the direct impact of the budget on the process of constructing the bankruptcy filing, one of the most significant things it can do is help create perspective. When facing financial hardship, the first response is to cut back on spending. When dealing with overwhelming debt can lead to cutting down on spending for many of the necessary goods and services we use daily. These are not compromises that anyone should ever have to make.
Very often, when constructing a budget, you can see the tangible impacts of the challenges inherent in dealing with overwhelming debt through the effects they have had on your household expenses before bankruptcy. Indeed, one of the most immediate and positive impacts that a bankruptcy can offer is realizing that you are now free to reallocate your budget to take care of your needs. All too often, creditors will push us to pay more constantly, disregarding how this might impact our lives, budgets, or well-being. In pursuing bankruptcy, you get to end this cycle permanently and affirmatively declare, beyond all doubt, that your budget now exists to serve you.
A budget should be designed to work for you and structured to provide for your family's needs. Working with our firm, we will ensure that the budget in your bankruptcy is tailored to do just that.
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When the time is right, or when you are ready, please don’t hesitate to contact Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.
