For many people, filing for a chapter 13 bankruptcy in St. Charles, MO is the first step toward moving past difficult financial situations and regaining control of their lives. Since it can take up to five years to successfully complete the bankruptcy and receive a discharge from the court, quite a few things need to change in the interim. Here are a few examples of how life will be during the bankruptcy period.
Living on a Cash Basis
During the chapter 13 bankruptcy in St. Charles, MO, the debtor is expected to function on a cash basis. This means creating a budget that will provide food, clothing, shelter, and access to medical care while those payments are sent to the court every month. For people who are accustomed to using credit cards whenever they like, this can be a major change.
At first, paying cash for everything will be difficult. Expect to fall short of cash before a payday and have to make do with whatever is in the pantry rather than being able to eat out this week. As time goes on and the budgeting prowess of the debtor becomes more efficient, it will be possible to stick to the budget, have a little fun now and then, and not feel deprived.
Avoiding New Debt
The court typically frowns on the accumulation of any new debt. That means buying anything on credit without the permission of the court is out of the question. If a real need arises, it must be cleared with the court trustee before the transaction takes place. For example, if the family car dies and the debtor needs to replace it with a reliable used vehicle, obtaining permission from the court to apply for a car loan is a must. This is true even if the plan is to work with a dealer who provides in-house financing and checks nothing other than the permanent address and the amount of money the debtor makes each month.
While living with a chapter 13 bankruptcy in St. Charles, MO can be difficult at times, it’s much better than the alternative. For anyone who is in dire financial straits, contact Van Dillen & Flood, P.C. today and arrange for a consultation. Bankruptcy may be the only practical way to deal with past issues and get back on track.