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HOLIDAY DEBT CURES
By:  Steven P. Taylor, Attorney at Law
It is that holiday season again. A number of potential debt traps exist that could lead to long-term credit card bills for payment of holiday things such as Thanksgiving dinners and Christmas presents and the travel to each that we must pay for.
Black Friday has descended upon us; but the days that shoppers swarm the stores for deals and sales continues on. The holidays will come and go.  During this festive season,  it’s spend, spend, spend. Family and friends receive their gifts and are glowing with cheer, love and thankfulness. Somehow, we manage to scrape up the extra money–with just a little help from credit cards and overtime.
Then January comes, and with the unwelcome credit card bill requesting payments for the Yuletide cheer. Unfortunately, the house payment, car payment and utility payment that are due do not have grace periods that extend to your tax refund. The money has been spent on the gifts in your child’s room.
Soon, you are having heated phone conversations with creditors and utility companies.    The easiest way to avoid post holiday pain is to prepare. Below are a few tips on how your can avoid the holiday debt trap.

1. Set up the amount you are going to spend on the holidays in advance. Divide that number by 11 and set that amount back every month as your “holiday fund”. By Christmas time you have easily saved the amount needed for a stress fee holiday season.
2. Keep your holiday shopping to a minimal. Make a short list of the people you’re going to purchase gifts for and stick to it. Got a long list of friends and relatives? Still make a short list and send everyone else an inexpensive holiday card. Remember, the debt you take on could become your first steps towards new financial troubles, so be careful.
3. Use cash and avoid credit cards when making purchases. While credit card use may be “easy” and convenient when you’re holiday shopping, it can also be very expensive in the long-term. First of all, using a credit card will make you purchase more than you would if you were using cash. Second, it’s not likely that you will pay it all off before accruing interest. So avoid any credit card mess by leaving the plastic at home.
4. Liquidate assets. Sell unused clothes, shoes, books or other items that are collecting dust in storage. Be friends with E-Bay or garage sales. If it is in storage, you probably will never use them. It’s time to let go. Look for part-time side work. Every bit counts
5. Consider layaway plans. Layaway allows consumers to purchase items without paying for it first and still avoid debt. How it works? The consumer places their purchases in storage at the store while making payments on the purchases over time free of interest. Some stores do charge a small fee, which is nominal compared to the interest the post-bankruptcy debtor could rack up if they use a credit card for their holiday shopping.
6. The last resort should be credit cards. They are for you to borrow money short term you don’t have and usually carry with it a ridiculous APR. (Annual Percentage Rate. If you must use the credit option, use a low interest rate card and try to pay the balance in full at the end of the month so you are only paying back the exact amount you borrowed! Always know how you are going to repay the credit card in full in less than 2 months. Remember for Short Term Use only.
7. Of course, borrowers who do take on new holiday debt may be able to discharge that debt in Chapter 7 bankruptcy if they are unable to repay it. That being said, I hope you enjoy your holidays. Don’t let the stress of finances bog you down! Times are hard.

Happy Holidays!
Steven P. Taylor, [email protected]
Law Office of Steven P. Taylor PC
Serving Central and Northern Indiana
1-800-966-8447
Filed under: Chapter 7 Bankruptcy

Think back to a time when you didn’t have any credit cards.
Life was simpler, wasn’t it? Buy something and pay for it once, never worrying about interest charges or falling behind.
It can be that way again. All you need to do is approach the world with the same level of rationality as you did in the past.
Here’s how.

Use A Debit Card For Hotels, Airfare And Rental Cars
My clients always use travel as a major reason why life is terrible without credit cards.
They’re shocked when I let them know that I routinely use a debit card for all of my travel-related expenses. Airline tickets and hotel rooms are particularly easy when it comes to debit cards, and even car rental companies have come around in the past few years.
One thing to know, however, is that the car rental company or hotel may place a hold on several hundred dollars’ of your checking account funds.
Some car rental companies that accept debit cards are:

• Dollar Rent-A-Car
• Budget
• Thrifty
• Payless
• Avis

Layaway For Retail Purchases
Layaway is the process by which you pay for a product over time, giving money to the retailer little by little. The retailer holds the product for you until it’s paid in full.
The benefit of layaway is that there’s usually very little cost associated with it. As opposed to credit cards that charge interest until the entire balance is paid off, the cost of buying something on layaway is usually less than $10.
Retailers offering layaway include:

• Kmart
• Sears
• Burlington Coat Factory
• Walmart
• Marshall’s
• TJ Maxx
• Toys R Us

Love Your Debit Card
I’m a big fan of using a debit card for smaller purchases because it’s easier and more convenient than going to the bank to withdraw cash all the time.
If you’re worried about account security and unauthorized charges, the Electronic Fund Transfer Act limits your liability.
Related:

• Lost or Stolen Credit, ATM, and Debit Cards (FTC)

Budget By Planning Ahead
In the old days, Christmas Club and Vacation Club accounts were used heavily by people who wanted to engage in short-term savings for a defined purpose. As credit card use grew, however, these accounts fell largely out of favor.
That doesn’t mean you can’t use the same idea for your own savings goals.
If you’re looking to make a major purchase and don’t have the cash, just open up a savings account and attach it to your main checking account. Have your bank automatically transfer a small amount – even as little as $10 each week – into the savings account.
In no time at all, you’ll have the money saved for your purchase.
A Little Planning Goes A Long Way
All of the tactics for living without credit cards require that you go through your life with a certain level of planning.
Impulse purchases made without having cash at the ready are more difficult, and spur-of-the-moment vacations  happen only when the bank account is fat.
If it keeps you out of debt and worry-free when it comes to money, I think it’s well worth it.

Ever forget where you put your keys? This clunky mass of metal and plastic, a critical piece of your day-to-day life, just goes missing.
Frustrating, but it happens. And most of the time, you’ll eventually find them sticking out of the lock of the front door or buried under a pile of mail on the table.
The fact that you can forget something so important makes it easier to understand how you can forget a particular creditor when compiling information for your bankruptcy case.
Fortunately, there is a simple step-by-step process involved in getting the problem fixed.

Your Schedules Can Be Amended While The Case Is Proceeding
So long as the bankruptcy case is still open (in other words, there’s been no discharge issued) you have the absolute right to amend your schedules at any time.
There’s a Florida bankruptcy case that says you give up the right to amend if you wait too long, but the case doesn’t hold weight in either New York or California – the two places where I practice law.
Related:

• FRBP 1009 – Amendment of Voluntary Petitions, List, Schedules, and Statements
• Chapter 7

6 Steps For Amending Schedules To Add A Creditor
If you need to add a creditor to your schedules, here’s what to do:

1. add the creditor to Schedule F;
2. complete a cover sheet for the amendment (note that there is no cover sheet requirement in the U.S. Bankruptcy Court for the Southern District of New York);
3. file with the U.S. Bankruptcy Court;
4. pay the filing fee of $30 to amend the schedule;
5. serve the new schedule and cover sheet on the U.S. Trustee, your bankruptcy trustee, and all affected creditors; and
6. file the certificate of service with the bankruptcy court.

Related:

• Amended Schedule(s) And/Or Statement(s) Cover Sheet (Central District of California)
• Affidavit Pursuant To Local Rule 1009-1 (Eastern District of New York)

Why You Need To Act Fast
If you file for Chapter 13 bankruptcy and do not list a creditor before the time for that creditor to file a proof of claim expires, then then the debt won’t be paid through the Plan. At the end of the case, it won’t be discharged.
If you file a Chapter 7 bankruptcy case, the rules are slightly more complicated. Depending on the circumstances involved, the debt may or may not be discharged at the end of the case.
Either way, it’s a good idea to amend your bankruptcy schedules as fast as you can. No sense in leaving loose ends hanging around when it comes to your bankruptcy case.

Debtors may be under the impression they are unable to get student loan debt discharged.  While this may be the case for some, others may qualify to have this debt eliminated but don’t bother asking their attorney about it.  When you file you are expected to list debt obligations you have outstanding, including those that [...]