CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Will My Spending Be Monitored If I File for Bankruptcy?

Bankruptcy And Spending Tampa, Pasco, And St Petersburg Florida.Bankruptcy and Spending

Bankruptcy can offer many advantages, but it can also mean exposing your financial life to the world. Information that would otherwise be private becomes the business of the trustee and the court. Not only does this mean other people will know about your debt, but it also means they’ll be legally entitled to have an opinion concerning your spending habits and your financial choices.

But does this mean your spending will be monitored if you file for bankruptcy?

Luckily, this isn’t the case. Or at least it isn’t as bad as some people imagine when they are considering bankruptcy.

One of the most common myths related to bankruptcy is that the court will monitor your spending habits once you file. Too many people avoid filing for this reason when it’s not even true. They choose not to do something that could benefit them financially because they are concerned the trustee will analyze their spending habits and set limits on how much money they spend.

It’s true, bankruptcy forces you to give up some control financially. The bankruptcy trustee does have the authority to review bank statements and other records to look for proof of fraud or misconduct. But he or she doesn’t care whether you snuck through the drive-thru one too many times this week or that you’re buying a pack of cigarettes or paying for weekly manicures.

The only thing the trustee wants to know is whether or not you’ve done something that could preclude you from qualifying for bankruptcy or if you did anything intending to hide money from the court.

Bankruptcy Means Test

The court will review your overall financial situation to determine if you qualify to file for Chapter 7 or Chapter 13. You and your attorney will do the same before you file. This includes filling out a means test.

The bankruptcy means test looks at your income and your expenses. However, only certain expenses can be included in the means test.

For instance, the cost of your mortgage, car payment, and groceries would be included as expenses and would show that you need at least that amount of money each month to make ends meet. However, the cost of those cigarettes or manicures mentioned earlier might not be included based on how much you are spending.

This doesn’t mean you can’t spend money on these things. It just means the court won’t allow you to put them into your bankruptcy budget.

What the court does allow is the cost of miscellaneous expenses. If there are certain things you spend money on but they cannot be included in your bankruptcy budget individually, you might be able to include them in the miscellaneous expenses. This gives you a great deal of leeway when it comes to how you manage your money once you’ve filed for bankruptcy.

To learn more about the bankruptcy means test, check out this information from NOLO.com.

Bankruptcy is about Debts and Assets, Not Monitoring Your Day-to-Day Spending Habits

The important thing to realize is that the goal of the trustee and the bankruptcy court isn’t to put you on a strict budget that leaves no room for fun or indulgence. It might be a good idea on your own to cut back, but the court is only concerned about your debts and paying back your creditors as much as possible out of the money and assets you have. What you do with the money that is exempted is up to you.

If you have concerns about how much control you’d need to give up if you file for bankruptcy or you want to know what your life will look like if you choose to file, we can help. For more information or discuss your situation with an experienced bankruptcy professional, contact the Law Office of Robert M. Geller at (813) 254-5696

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

10 Signs You Should File for Bankruptcy

When it comes to your finances, there may come a time when you feel like bankruptcy is the only way...
Read More

What Do You Need to Know Before Filing for Bankruptcy? A Chapter 7 Bankruptcy Attorney in Florida Can Help You During this Time

What happens during the time leading up to filing for Chapter 7 bankruptcy? A Chapter 7 bankruptcy attorney in Florida...
Read More

What Does It Mean to Declare Bankruptcy?

What does it mean to "declare" bankruptcy? Your bankruptcy law attorney will help you through the process. Declaring bankruptcy is...
Read More

Student Loan Forbearance Ends April 30th. Here’s What You Need to Know

The federal government extended forbearance of repayment of student loans during the COVID-19 crisis. This forbearance was due to end...
Read More

Is Better Money Management on Your List of Resolutions for 2022?

If you’re like most Americans, improving your financial situation is on your list of New Year’s resolutions for 2022. Whether...
Read More

3 Reasons to Send Your Bankruptcy Attorney in Tampa Florida a Christmas Card

Have you begun making your Christmas card list yet? Did you include your bankruptcy attorney in Tampa, Florida? It seems...
Read More

What Was the Biggest Money Management and Bankruptcy News of 2021?

Like most years, bankruptcy was a topic that arose in the news many times throughout 2021. Topics related to money...
Read More

3 Best Bankruptcy Tips of 2021

Learning how to manage your money is an ongoing process. Even the smartest money minds out there can always learn...
Read More

How to Prevent Bankruptcy from Ruining Your Holiday Season: Why a Spending Spree Before Bankruptcy Could Hurt You in the New Year

Should you go on a spending spree before bankruptcy to celebrate the holiday season? The answer might surprise you. The...
Read More

How to Avoid Holiday Overspending

The holidays are upon us and, as usual, many people are trying to keep their spending within a budget. As...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions