When filing for bankruptcy, whether it be chapter 7 or chapter 13, it is generally expected that filing for bankruptcy will lead to you losing a substantial portion of your assets in order to pay a portion of the debt. With chapter 7, all of your assets are liquidated, save for some assets that are exempt. However, there are still some ways that you can legally save money on your bankruptcy.
You May Accumulate Funds Under Chapter 13
When filing for chapter 13 bankruptcy, there are some funds that are allocated for your monthly expenses. These expenses are expected to ebb and flow, so it is possible that you may have some accumulated funds if you have lower expenses than expected. This can be accomplished by looking for discounts and other ways to save money. However, if your accumulated funds go up substantially, your trustee may expect you to make higher payments to account for your improved situation. In most cases, you will only develop accumulated funds if you have an increase in your income. However, if you begin buying in bulk, start performing your own repairs, renegotiate insurance payments and engage in various other actions, you may be able to cut your expenses to the bone and begin saving money.
You Will Need To Budget
One of the challenges of filing for bankruptcy is that you must budget. You will need to keep your expenses below a certain amount in order to have enough disposable income to pay down your debt. If you have filed for chapter 13 bankruptcy and your expenses rise too high, your chapter 13 may be converted into a chapter 7 in some states.
You May Own A Savings Account
Maintain a savings account throughout the bankruptcy process. Whenever you have any money left over, make sure to save it in order to accumulate interest. Inform your trustee about the savings account so that he or she can determine whether the savings should be used to pay down debt.
You Should Still Use Credit
After you have filed for bankruptcy, you will likely learn to love cash as you fear taking on credit. This can be a good thing because it can reduce the risk that you will accumulate debt in the future. However, you will want to make sure that you continue to use credit in order to build up your credit score both for employers and future landlords.
Contact an attorney, like Thomas A Blake, for more help.Share