07 Sep Pigs Get Fat And Hogs Are Slaughtered In Bankruptcy.
When you file bankruptcy, you should become acquainted with the phrase: Pigs get fat while hogs get slaughtered. It is a great phrase to live by, not only during bankruptcy but in everyday life as well. This phrase goes back to the basics of bankruptcy and life. Everything must be done in moderation. More specifically you must budget and live within a reasonable budget if you expect to obtain positive results in your bankruptcy.
A pig can continue to live their life frolicking about in their happy mud pies without a care in the world. In contrast, the hog suffers the ultimate consequence of its gluttony, death by slaughter. When you file for bankruptcy the goal is to help you regain financial control. Budgeting is the process by which you are able to achieve this financial goal.
It is not uncommon for people to bring me a proposed budget that outlines three to four different food sources. Food for the home, dining out, school lunches and food for work. It is not uncommon that they want $800 for home, $300 for dining out, $150 for school lunches and $200 for work lunches. This is a total of $1,450 for a family of 3 -4 people to eat each month. Generally, these families are bringing home $3,000 per month. This means that they wish to spend approximately 50% of their take home pay on food.
The National Standards for a family of four is $752 per month for food. All food sources! The National Standards are the guidelines that we use to perform the means test. If you keep doing the things the way you have always done them you will continue to get what you have always got. Which in this case is debt.
I would advise my clients that yes, we can go with the $800 for the home budget and yes, I can argue $150 for school lunches, but that is it. You can pack a lunch for work and dining out is a treat that can come out of your recreation budget. Yes, Virginia dining out is a treat and not a necessity. My budget is a pig budget and the budget in the previous paragraph is a hog budget that would definitely be slaughtered in my district.
You can use the pig and hog analogy to every situation in bankruptcy. Let’s say that you want to purchase a vehicle. If you are going to purchase a BMW for $30,000 at a six year note with 15% apr, your monthly payment is $634.35 per month. The first thing the judge will ask is if he/she does not already hear the hog squealing is: Is this a better car than I drive? If the vehicle is then the judge will probably deny the request straight away. If the judge thinks that the make of the vehicle is okay he/she will probably still hear the hog squealing in the background and deny the request.
This is a real example of a Motion to Incur Debt to purchase a vehicle. Keep in mind that your district, judge, trustee and set of circumstances are different. Every debtor and their circumstances are different. Debtors are like snowflakes. NO TWO CASES ARE EXACTLY THE SAME. However every judge, trustee and bankruptcy district has a hog line that once you cross it your request will be slaughtered. You must learn what is reasonable for your circumstance and budget accordingly.
Gary D. Barnes is one of my Chapter 7 Trustees and you can count on Mr. Barnes saying one phrase at least once every Chapter 7 docket. “Folks, you are here to get a fresh start and if your expenses exceed your income how are you going to accomplish this?” Mr. Barnes is absolutely correct regardless if you are filing a Chapter 7 or Chapter 13. If your expenses continue to exceed your income you will never get a fresh start.
This does not mean that you cannot have a negative budget going into bankruptcy regardless of a Chapter 13 or a Chapter 7. What this does mean is in a relatively short time you will need to have a plan on how your can either cut your budget or raise your income. Or you can take it to the next level and do both. Use the pig and hog analogy to reduce your expenses and increase your income by changing your IRS withholdings or getting a part time job.
Each and everyone of you have the power and the ability to get out of debt. It is going to take time and hard work but it can be done. Using the pig and hog analogy will help you to take control of various aspects of your life. Even the Bible uses the pig and hog analogy somewhat by discussing the issue of gluttony. Gluttony is considered to be one the seven deadly sins. Although I do not think it is a sin per se to spend more than you make it is simply more evidence that even the Bible calls for moderation in one’s life.
The bottom line is moderation is your key to a successful bankruptcy. As Dave Ramsey says: Live like no one else, so that you may live like no one else. It is a corny saying but it is very true. If a pig continued to eat like a pig instead of trying to keep up with the hogs, he still be enjoying life as a pig instead of being slaughtered like hog.
Remember that knowledge is power and the more knowledge you have about budgeting, the more power you will have to regain financial control of your life.