02 Sep Budgeting Problems and Bankruptcy: Part I
A good bankruptcy lawyer will take time to help you figure out your monthly household budget. In other words, how much money hits your kitchen table every month and how is it spent? It is all about income and expenses.
Calculating income is the easier part. For some clients, it is very predictable because they live on a fixed income like social security or unemployment benefits. Quantifying income is also simple for those who earn regular wages due to a salaried position or 40-hour work week.
For the self-employed, however, the income calculation is more challenging. I’ve had many self-employed clients declare that no two months are ever the same.The income could be great one month, and non-existent the next.
For these clients, I will often average income over a six to 12 month span. Before long, income (or lack of income) patterns begin to emerge that are useful for budgeting purposes. At this point, some may even recognize that credit cards were propping up a failing business that should have closed long ago.
So, what are you doing to increase your monthly income? Some may be able to increase their monthly income by improving job skills, taking a second job, or even moving to an area with better job opportunities. Others, however, may be forced to do their best living on a fixed income due to circumstances beyond their control. Every client is different.
Bottom line: I need clients to visualize that pile of money on their kitchen table. They must know how much money they have to work with every month and plan accordingly.
If you have too much debt and too little income, you should consider contacting an attorney who knows how to get you back on track. A qualified bankruptcy attorney has the required skills necessary to re-organize your finances and help you understand the importance of proper budgeting for the future.
Next installment: The really hard part of budgeting.
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