Budget and spending habits

[mountaingal]

Figured I would start a new thread since it's a different topic than my prior one.

So this BK process has really forced us to look hard at our spending habits which I am sure everyone in BK has faced too. We realize that while our spending habits are not lavish by any means, there are areas we need to tighten up. We eat out too much and a trip to target to buy 2 items turns into a $100 bill. Our lives are busy with both of us working, me back in college, and we have a child so grabbing a quick bite is necessary at times. My question is, will our current or past spending habits impact the process of the BK negatively? I am more than willing to admit our part in this BK and our current financial status but with the BK I realize the areas we need to improve on and the importance of a budget. We may eat out too much yes, but it's a sandwich shop or Panda Express, not a 5 star steakhouse LOL. Will we just get a lecture and told tough cookies you guys have to change your spending or will they pick us apart and dismiss the BK? I am just curious.

[justbroke]

The question of whether or not you're capable of budgeting or simply refuse to budget is the only answer to these questions. A Chapter 13 can be difficult at first; especially if you have grown accustomed to eating out several times a week. You will need to plan your grocery shopping and make the best use of your $$$ (I love BOGO at Publix!). The nice thing is that if you can eat more prepared meals then your actual food budget will be lower than the $$$ that you are allowed. Hopefully, you "save" that difference which can be several hundred dollars a month! It will come in handy when you do want to go out for a special ocassion or "once a month" or some other similar thing.

Learn how to do quality things at home or for free around your area. While I did purchase annual passes for the family for Disney World, it was the best money spent because it covered all our "entertainment" (and Disney allows residents to pay in installments so it was under $90/month at the time). Go for walks. Movie night at home is awesome (rent a movie on demand or visit the Red Box).

I have to repeat this. Those who can't or refuse to budget, will not survive a Chapter 13. The Trustee and your attorney are not going to have your case dismissed because you overspend on going out all the time. You will just quickly find that you have no money left for other things and the same spiral which led to the bankruptcy will rear its ugly head once again.

[mountaingal]

Thank you justbroke. We are more than willing to budget and I am admitting that we need help with this. We will be using a budgeting software for the first time and I think this will help keep us accountable as well. I think my biggest issue with BK is swallowing my pride and I have only in recent weeks started to feel less stressed about this and accepting it. It is embarrassing to me that we are at this point but now I know that all we can do now is look ahead and pave a new path. The BK process has been good in that it's forced us to see where we waste money. I cancelled our cable already (have Amazon TV now), car insurance lowered, and I was able to get our life insurance cut in half. Little by little I am carving away at things that put a dent in our budget. And yes, we just need to eat at home

[justbroke]

You seem to be ready for this. Do not feel bad about filing and do not let anyone else make you feel bad. It's purely a financial decision. While it is, at times, difficult to separate the emotional decision from the business decision, we all need to think about the financial and emotional health of our family itself. Nothing was more uplifting, to me, than walking out the bankruptcy court's front doors the day I filed in 2008.

I was actually smiling, had only $18 in my pocket for 10 days and not even enough to take a cab all the way to my home located 11 miles from the courthouse. I had to make a collect call for someone to pick me up 4 miles from home. I was still very happy.

[switch625]

My question is, will our current or past spending habits impact the process of the BK negatively?

Generally, your past spending habits have no bearing on your Ch 13 case. . People file for BK for all sorts of reasons and the destination of insurmountable debt that many of us tried to stay clear of has many roads leading to it. Mine was excessive spending and neither the trustee, nor my attorney nor BK judge criticized me for how and why i'm filing for BK. Nor did any of that have any bearing on the confirmation of my case. As for present spending, it's the same approach, but your monthly income and expenses as you report them on your BK petition must support a feasible plan as per the BK code and your court's local rules. As JB indicates, if you fail to live within the means of your Ch 13 plan's requirements, you may fall behind on your monthly payments to the trustee and you may face a motion to dismiss your case for failure to pay into your Ch 13 plan. The key to your present spending habits is providing your attorney a reasonable, but realistic accounting of your monthly expenses. In other words, if you need $600 a month for groceries, don't report $400 to your attorney in an attempt to satisfy the trustee and the Court. Let them bear the burden that your plan is not feasible and you are not pledging disposable income with a $600 monthly grocery bill. On the other hand, if you have a $1500 monthly bill and that is due to having prime rib and filet mignon every other night and your attorney says that food bill may be too high for what the trustee will perceive as reasonable, well, you will need to cut the expensive beef out of your budget. You must ensure that you establish living expenses that will get you through the next 3 or 5 years. The worst thing you will hear is that an expense may not pass muster for confirmation and may need to be lowered, You should not hear a "how dare you" from the trustee for budgeting yourself 12 inch subs from Subway instead of only 6 inch subs.

[LadyInTheRed]

If past spending habits (other than large luxury purchase on the even of filing) caused problems for debtors in BK, a lot of us would have had some big problems.

As far as the need to grab a quick bite, with some planning you can do that without eating out. Sandwiches can be made quickly if you have the makings on hand. You can even make sandwiches ahead if you leave off the condiments that would result in a soggy sandwich. If you like lettuce and tomatoes on your sandwiches, have them washed, sliced and ready in separate containers to use as needed. Make a huge batch of tuna or chicken salad.

Throw some meat, vegis and seasonings into a crock pot in the morning and come home to a ready to eat meal. You can even prep everything in the evening to make it quicker in the morning. This is a great way to use inexpensive cuts of meat with delicious results. If family members are on different schedules, you can each serve yourself from the crock pot when you are ready to eat.

On days when you have more time, cook large meals with enough leftovers for lunches or a dinner or two later in the week. Reheating leftovers is probably just as quick as stopping at Panda Express. Prep foods ahead of time that you can throw together for a quick stir fry later in the week.

Have things like granola bars, nuts and fruit on hand when you need to grab a quick bite and have nothing else available.