When you file a Chapter 13 bankruptcy, you have to make sure that you are ready to live on a budget. The case has a major impact on your finances because you will have to pay the bankruptcy court on a set schedule. Making sure that you can make ends meet during this repayment period can be a challenge, but it isn’t impossible.
You must try to cut your expenses down as much as possible. Just cutting out one beverage from a coffee shop isn’t going to make much of a difference but going to see the barista twice per day five days per week will add up quickly to money that you can put toward other living expenses. Look at your shopping habits, how often you eat out, and what regularly occurring bills you have coming out of your account.
Take the time to write out a budget. Some people follow it better when they can see it on paper. If you say you have a specific amount of money for entertainment, you know that you can only spend that amount before it is gone. By learning to follow your budget during the bankruptcy, you are less likely to make poor financial decisions after the discharge.
You have to think about how the bankruptcy filing will impact your future. You won’t be able to rely on credit any longer, so learning to live on your own income is a priority. This is tough for some people, but you will find it much easier to pay for everything once you know what you have coming in and where it goes from there.