A single mother was in my office last week, discussing her financial options. She was considering bankruptcy, but was worried about the money she would make during that period. She asked me if she would be allowed to keep any of her income or to save money for emergencies. With three young children at home, you can understand her concern.
A lot of people that I meet with ask the same questions. They wonder what will happen to the money they make and are particularly worried about money saved for emergencies. After being in financial trouble, the last thing they want to do is have a situation where they need to rely on credit or loans again.
First of all, bankruptcy is not designed to take away all of your money. It was created by the federal government to help honest, unfortunate people who need help with their debts, not to punish people more when they are already in distress. While you are bankrupt, all of your money will not be taken away and any money that you are able to save will not be touched.
Secondly, after experiencing financial trouble, it is good to see that this woman is planning for the future – she wants to save money for emergencies so she doesn’t have to use any more credit cards or take out any more loans.
When you are bankrupt you have to pay a monthly amount to your trustee based on family income and how many people are in your family. Your trustee will then distribute this money to your creditors. Your bankruptcy trustee will be able to discuss this amount with you and the responsibilities that you will have during this time. If after you have paid this monthly amount and your living expenses, and you still have money left over that you want to save, then that is fine. Being bankrupt does not stop you from earning a living and saving money.
If you have any questions about what will happen to your money when you file for bankruptcy or any other financial options, call me at 310-PLAN for a free consultation. You can also email me any questions you might have about this situation or any other financial concern. Remember: you deserve a fresh start. Let’s make a plan so you can start enjoying your healthy financial future.
You must log in to post a comment.