If you’re thinking about bankruptcy or already in bankruptcy, especially a Chapter 13, the holidays are tough. You want to provide a nice Christmas for the family but money is tight. You might be tempted to use your credit cards. To some, that’s an attractive strategy: charge Christmas and file bankruptcy in January.
That would be a big mistake. If you’re thinking about filing bankruptcy, using credit cards could be considered fraud. When you swipe that card, you’re making a promise to the issuer of the card that you’ll pay the debt. But if you’re already thinking about filing, you’ve already come to the conclusion that you don’t have enough money to pay your debts as they come due. In other words, you’re making a false promise when you make that charge at the store. You could find yourself in litigation in bankruptcy over whether those charges can be discharged or whether you’re even entitled to a discharge at all.
If you’re in bankruptcy, you probably don’t have a credit card, but if you do, it’s still a mistake to use it. If you’re in a Chapter 13 you are already operating on a strict budget. There’s going to be very little room for paying more than the minimum payment on a credit card. That means you could be stretching the joy of Christmas 2016 well into the 2020s. Add Christmas 2017 and 2018 and you’ve just painted a bleak picture of Christmas Future.
In fact, even if you’re not in bankruptcy or thinking about it, don’t charge Christmas. I heard the other day that the average family spends $3,000 on Christmas! I find that hard to believe. Maybe it includes everything: food, travel, decorations, as well as gifts. Regardless, don’t fall into that trap. Make this Christmas about memories, not things. Make it a pioneer Christmas where everyone makes a gift instead of buys one. Go downtown as a family and see the lights. Volunteer some time at the homeless shelter to see people much worse off than yourself. Rent a movie and make popcorn instead of going to the movies. Bake cookies and deliver them to the neighbors together.
If you use a little common sense about the holidays, maybe I won’t have to see you in January. That would be just fine with me.