Ohio Bankruptcy, Dayton Bankruptcy
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Your Money In Bankruptcy

Your Money In Bankruptcy

: Richard West Law Office

money savingMany people wonder what type of scrutiny they will be under by the court if they file for bankruptcy. Will the court monitor dictate my spending? Will I be limited in my spending? Will I get in trouble for buying something nice? The short answer is: it depends.

Unique Situations

The reason it depends is because everyone has unique financial situation. No two people entering the Cincinnati bankruptcy process will have the same income, debts, asset, and spending habits. Therefore, it is hard to answer a definitely ‘Yes’ for these questions. However, there are some examples that could help explain whether you would be given rules for your spending.

Consider a person who has very little income and spends moderately for daily living essentials, but also spends an unusual amount in one category; let’s say like cigarettes. Would the court dictate they must give up smoking and pay the creditors that amount instead? No.

Consider a family who earned minimally and also spent minimally, but had a death in the family or a child away at college. Would the court say they cannot spend the money necessary to go to the funeral or visit their child just because they were in an active bankruptcy? No.

The bottom line is that the bankruptcy court looks at your overall financial history and spending habits to determine if ¬†there are any funds or ways to come up with¬† money to satisfy debts to creditors. Chances are if you qualify for a Chapter 7 you aren’t likely to be told to stop your lifestyle because, well, it’s probably not all that lavish to begin with. On the other hand, if you are in a Chapter 13 case you could find yourself under a bit more of a watchful eye or asked to give up that third flat screen television, but this is certainly on an as-needed basis.

It is questions like these that make the bankruptcy process a bit confusing at times. Just remember that the bankruptcy process seeks to help you, not hurt you. So any restrictions or requests to give up un-exempt luxury items are always manageable and reasonable.