As the holiday season approaches, you might be worried about being able to afford gifts and other holiday-related events after you have completed a Chapter 13 bankruptcy.
While a Chapter 7 bankruptcy discharges your qualifying debts, a Chapter 13 bankruptcy allows you to pay off your debts through a 3- to 5-year payment plan.
Prepare to pay cash for everything
Your Chapter 13 bankruptcy payment plan might have provided you with an ideal way out of your unmanageable financial situation. However, you are generally forbidden from acquiring new debts. Any new debts you do accumulate cannot be part of your payment plan.
This means you must pay for all your holiday season expenses in cash. This can be difficult to do, especially while trying to keep up with your payment plan.
Plan and budget
With some careful planning, you can still enjoy the holidays while making your Chapter 13 payments. Start budgeting for your holiday expenses as soon as you can.
Part of a Chapter 13 bankruptcy typically involves not spending more than $600 at a time. This means that expensive gifts are probably out of the question for this year.
Get creative with gift giving
There are plenty of quality, inexpensive ideas for gifts. Consider having a special picture framed for someone or baking their favorite treats. If you enjoy crafts, make them something handmade that suits their tastes.
If you normally buy gifts for several people, propose doing a gift exchange this year, such as one where each person draws a name and picks only that person.
Focus on experiences, not money
Remember that it will not be this way forever. One day, you will be free of your payment plan. Look at this as a temporary sacrifice that is necessary for a better future.
Finally, remember that the holidays are not supposed to be about how much money you spend, or who gives the best gifts, but about taking time out of our daily routines and spending time with friends and family. Try to focus on this as your priority vs. spending money.