Are you having trouble making ends meet with your current income? Do you have any money left over at the end of each month to pay your bills after paying your living expenses? Living from paycheck-to-paycheck is stressful for you and for your family. Bankruptcy is often the best solution for a person’s financial problems. A bankruptcy filing gives you a fresh start with a clean slate to begin rebuilding your financial well-being for a better future. Unfortunately, some people do not consider filing bankruptcy because they fear the court will monitor their spending habits.
Your Spending Habits and Bankruptcy
It is a common bankruptcy myth that if you file bankruptcy the bankruptcy court will monitor your spending habits. Many people fear filing bankruptcy because they are scared that the bankruptcy trustee will pick through their bank statements to analyze their spending habits. Even worse, they fear that by filing for bankruptcy relief, the court will monitor or even limit their spending habits. This is simply not true.
The trustee does have the authority to review your bank statements and other financial records to determine if there are any preferences, fraudulent transfers, or other evidence of fraud or misconduct. However, the trustee is not reviewing your financial records to see how many times you ate at a restaurant, what you pay for your cable service, or determine if you spend your money on cigarettes, alcohol, manicures, or daily cappuccinos.
Your Spending Habits and the Means Test
The court will review your budget to determine if you qualify to file bankruptcy under Chapter 7 or Chapter 13. Some of your expenses may not be included on your bankruptcy budget and the Means Test because the expenses exceed the allowed maximum amount for that expense according the bankruptcy law. Some expenses may not be included on a bankruptcy budget and the Means Test at all. For example, if joint debtors both smoke cigarettes and spend an average of $300 per month for cigarettes, this spending habit may not be allowed on the bankruptcy budget and the Means Test. Another example would be paying for a membership to a health club. Depending on the amount of the membership, the debtor may or may not be permitted to claim the expenses or may only be able to claim a portion of this expense.
The bankruptcy court is not telling you that you cannot smoke cigarettes, join a gym, or buy expensive coffee each day. It is telling you that these expenses may not be included in your bankruptcy budget. However, the budget does allow for miscellaneous and other costs that may incorporate some of these expenses. When you retain my firm, we will review your spending habits to determine what expenses may be included in your bankruptcy budget. In most cases, debtors find that most of their expenses are eligible to be included on their bankruptcy budget. Other than this, the court will not dictate your spending habits because you file bankruptcy.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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