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Disability Lawyer > Blog > Bankruptcy > Bankruptcy and the Holiday Season: What You Should Know

Bankruptcy and the Holiday Season: What You Should Know


The holiday season often involves spending a significant amount of money — or at least spending more money than you do on a regular monthly basis — during the holidays. For people who are already struggling with debt, the holiday season can be especially stressful, and they may feel pressure to purchase gifts and other goods and services on credit that they cannot afford. If you are in this situation and you are also considering bankruptcy, it is extremely important to talk with an experienced bankruptcy lawyer to understand how spending during the holiday season could impact your upcoming bankruptcy case. Our firm can provide you with more information about making purchases on credit during the holiday season prior to a bankruptcy filing, and we can speak with you in greater depth about the specific facts of your case.

Higher Expectations for Holiday Spending 

Holiday spending often gets a little bit out of control, and extra spending can be especially complicated for consumers who already have a significant amount of debt and are considering bankruptcy. According to PwC, holiday spending in 2023 is expected to rise from the previous year, and holiday spending has risen continuously over the past few years. Indeed, PwC estimates suggest that consumers will allocate “an average of $1,530 for gifts, travel, and entertainment,” and about 40 percent of US households will likely spend more this holiday season than they did last year.

Yet if you are planning to file for bankruptcy, spending on credit could result in serious complications in your bankruptcy case.

Buying Anything Extra for the Holidays Could Be Considered a “Luxury” Purchase 

Under US bankruptcy law, purchases with a single retailer on credit totaling more than $800 are considered “luxury” purchases, and they are not dischargeable in a bankruptcy case if you have made them within 90 days of your bankruptcy filing. Similarly, credit card cash advances of more than $1,100 within 70 days of your bankruptcy filing are also considered non-dischargeable for this reason.

Moreover, consequences can go beyond the mere fact of these debts being non-dischargeable. Allegations of fraud could arise, and you may need evidence showing that you intended to repay the purchases, or the purchases were reasonably necessary to support yourself or your family.

Create a Budget and Plan Your Bankruptcy Accordingly 

What can you do to avoid these issues? First, make a holiday budget and do not make any charges you cannot afford to repay on credit — for gifts, holiday travel, holiday meals, decorations, and other common sources of holiday season spending.

In addition, if you are planning to file for bankruptcy within three months of the holiday season, it is a good idea to talk with a lawyer now to make plans and to understand the implications of any actions you might take prior to your bankruptcy filing.

Contact a St. Petersburg Bankruptcy Attorney Today 

If you are considering filing for bankruptcy, it is essential to get in touch with an experienced St. Petersburg bankruptcy attorney at the Law Offices of Stephen Barszcz who can assist you. Bankruptcy law is complicated, and you will want to have a lawyer on your side who can help. Do not hesitate to reach out to us for answers to any questions about the bankruptcy process or to get started on your bankruptcy petition.




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