Paralegal said NO Christmas Shopping

[MelodyAM75]

I met with the paralegal today and she said not spend money on anything like Chrismtas presents. Does she mean just until I file and then I can do what I want after that? We are planning to pay for the filing on November 19.

[Pandora]

well - technically even once you file you cant " do what you want " unfortunately. All of your disposable income is supposed to be paid into your CH. 13 plan - you can try and put in "Birthday / Christmas" in your schedules as expenses; some trustee's allow it..other's dont. Ours allowed $50 a month for such areas, however if your trustee doesnt - then you need to pad your budget somewhere else, and take it out that way.

As far as purchasing gifts now - I guess maybe the paralegal is concerned about the trustee taking the items, as well as you spending money that technically, should go to creditors. You should ask the paralegal what she meant, just to be safe, however I'm sure its the reason I listed.

[MelodyAM75]

I called another lawyer and they said that they tell clients not to spend money excessively between the time of filing and 341. I don't plan to go crazy at Christmas, but I do usually spend $200 on each of my two children. My son's birthday is Dec. 1 and I will need to spend $100 for that and my daughter's birthday is Janaury 11 so that will be at least another $100 (luckily I bought some clearance things over the summer for part of her gifts). The thought that someone is going to scrutinize every penny that I spend makes me nervous.

[Flamingo]

I called another lawyer and they said that they tell clients not to spend money excessively between the time of filing and 341. I don't plan to go crazy at Christmas, but I do usually spend $200 on each of my two children. My son's birthday is Dec. 1 and I will need to spend $100 for that and my daughter's birthday is Janaury 11 so that will be at least another $100 (luckily I bought some clearance things over the summer for part of her gifts). The thought that someone is going to scrutinize every penny that I spend makes me nervous.

What scares me in your posting above is the phrase "I will need to...." You don't NEED to spend anything when you are broke and have to (or need to) file bankruptcy. We all found out the kids will not hate us if we can't afford to get them the expensive stuff they want and our family won't hate us if we cannot afford to go out to eat with them, go on vacations, etc. It will all come back in time but right now you have to get your financial house in order and worrying about having money to spend for gifts is not a priority. We saved for Xmas gifts, shower presents, etc. by saving all our change in a big jar every day and it adds up quickly.

Since you are posting this under the chapter 13 forum I am assuming you are investigating filing Chapter 13. Keep in mind that the cause of the majority of Chapter 13 failures are the debtors unable to change their lifestyle and learn to budget, do without, go discount, etc., etc. You will get back to the better times but you have to get out of the hole now to get there. You don't "need" to spend hundreds of dollars on Xmas presents, no one will expect them and your kids unless they are under six already know you have financial problems so it is a good opportunity for them to learn by what you do also. Better times will come but it's all up to you. Best of luck to you.

[MelodyAM75]

I know that I could get by with less. I already use coupons often and shop on Ebay for clothes often. I don't plan to get my kids laptops and Ipods...they are 8 and 2 and just want a few Zhu Zhu pets, a Fisher Price dollhouse for my daughter, Tae Kwon Do assessories for my son and skates for both of them. I don't think those items are too extravagant. If I can't get them, my parents or in-laws will, but I don't want to have to ask them do that. I will go without things before I have my kids wake up to find that Santa Claus forgot to stop by our house (yes, they both still believe in Santa Claus). I am sure that I can't be the only mother who wants a nice Christmas for her kids each year. I do freelance writing as a part-time job (I am a teacher, too) and this time of year I stay up late nights and work all weekend on articles so that I make money for the holidays. Is it wrong of me to bust my butt working overtime to spend the money on my kids? I have a week off at Thanksgiving and 2 weeks off at Christmas and that gives me a lot of time to work on freelance stuff. If worse comes to worse though I will just tell my parents what the kids want and they'll get it. They already buy 80-90% of the kids clothes because they want to and they may have to start paying for my 3-year-old's dance class and my 9-year-olds Tae Kwon Do class if those become an issue. I feel those activities are very important because I come from a family of obese people and my kids need to be active. Also, my son suffers from low self-esteem as a result of dealing with severe dyslexia and taking Tae Kwon Do has made a major difference in how he feels about himself. I would never take those things away from them. I didn't get to be activites until I was a teenager and I dealt with low self-esteen and I don't want that to happen to them.

What scares me in your posting above is the phrase "I will need to...." You don't NEED to spend anything when you are broke and have to (or need to) file bankruptcy. We all found out the kids will not hate us if we can't afford to get them the expensive stuff they want and our family won't hate us if we cannot afford to go out to eat with them, go on vacations, etc. It will all come back in time but right now you have to get your financial house in order and worrying about having money to spend for gifts is not a priority. We saved for Xmas gifts, shower presents, etc. by saving all our change in a big jar every day and it adds up quickly.

Since you are posting this under the chapter 13 forum I am assuming you are investigating filing Chapter 13. Keep in mind that the cause of the majority of Chapter 13 failures are the debtors unable to change their lifestyle and learn to budget, do without, go discount, etc., etc. You will get back to the better times but you have to get out of the hole now to get there. You don't "need" to spend hundreds of dollars on Xmas presents, no one will expect them and your kids unless they are under six already know you have financial problems so it is a good opportunity for them to learn by what you do also. Better times will come but it's all up to you. Best of luck to you.

[Peeps]

Isn't there a risk that a trustee could look at the situation differently? If you're willing and able to work your butt off for gifts then couldn't he/she draw the conclusion that you also have the ability to work your butt off to pay old debt? Assuming you're showing the extra income from freelance work on your schedules, wouldn't that be something that might be questioned anyway? Their idea of needs/wants might differ significantly from yours.

[mrskal]

I have to agree with Flamingo, sorry. It is not that you can't buy them anything, but at 8 and 2, do you really need to spend that much on them? (or at any age for that matter) I think the lessons are fine, kids need that, and you said you bought some stuff already. The dollar store can be a saving grace when it comes to kids gifts, you can get books, toys, etc...I luckily dont have small children and my daughter has learned that if she wants something, she will have to get it herself. I plan on spending $25 this year for her for X-mas and she will be the only person I buy for at all.

[debee]

Do you have an attorney, Melody? It's not clear from your posts. It almost sounds like the paralegal is giving you face-to-face legal advice and the lawyer was an anonymous phone consult.

[Flamingo]

I know that I could get by with less. I already use coupons often and shop on Ebay for clothes often. I don't plan to get my kids laptops and Ipods...they are 8 and 2 and just want a few Zhu Zhu pets, a Fisher Price dollhouse for my daughter, Tae Kwon Do assessories for my son and skates for both of them. I don't think those items are too extravagant. If I can't get them, my parents or in-laws will, but I don't want to have to ask them do that. I will go without things before I have my kids wake up to find that Santa Claus forgot to stop by our house (yes, they both still believe in Santa Claus). I am sure that I can't be the only mother who wants a nice Christmas for her kids each year. I do freelance writing as a part-time job (I am a teacher, too) and this time of year I stay up late nights and work all weekend on articles so that I make money for the holidays. Is it wrong of me to bust my butt working overtime to spend the money on my kids? I have a week off at Thanksgiving and 2 weeks off at Christmas and that gives me a lot of time to work on freelance stuff. If worse comes to worse though I will just tell my parents what the kids want and they'll get it. They already buy 80-90% of the kids clothes because they want to and they may have to start paying for my 3-year-old's dance class and my 9-year-olds Tae Kwon Do class if those become an issue. I feel those activities are very important because I come from a family of obese people and my kids need to be active. Also, my son suffers from low self-esteem as a result of dealing with severe dyslexia and taking Tae Kwon Do has made a major difference in how he feels about himself. I would never take those things away from them. I didn't get to be activites until I was a teenager and I dealt with low self-esteen and I don't want that to happen to them.

Everyone has their own situation as to personal things in their lives. Filing BK and being at that point is a big life event that brings unwanted changes and while we all can come up with all the excuses we want for why we are there, being saddled with debt and trying to get out from under that debt is a big priority. It's difficult not being able to provide what one did in the past and you are extremely lucky to have such wonderful parents to help out with your children. It is also embarrassing to have to be in that position not to be able to provide your child with what they want...in the past, one would whip out the credit card and get it. Now one cannot do that and has to change their ways and learn to save for items, put things on layaway if possible or be lucky enough to have friends or family step in. The big issue is the change and how to cope with it and to learn to live on a cash only basis without the need to have something right now. It's difficult with kids and BK. They were used to getting what they want and right away and younger ones just do not understand.

Discuss your situation thoroughly with your attorney as your child's needs. Also note the trustee may question how you were able to afford their classes, etc. and may view your parents' input to help out with the kids as incoming funds to your household income.

[helpmeout]

I would ask an actual attorney about Christmas gifts. I can't see how they would be a problem as long as they aren't expensive. Something like a Wii would probably create an issue, but a $25 toy or outfit? I don't think so. But an attorney would be a better person to consult.

[Pandora]

they are 8 and 2 and just want a few Zhu Zhu pets, a Fisher Price dollhouse for my daughter, Tae Kwon Do assessories for my son and skates for both of them. I don't think those items are too extravagant.

They already buy 80-90% of the kids clothes because they want to and they may have to start paying for my 3-year-old's dance class and my 9-year-olds Tae Kwon Do class if those become an issue. I feel those activities are very important because I come from a family of obese people and my kids need to be active.

Also, my son suffers from low self-esteem as a result of dealing with severe dyslexia and taking Tae Kwon Do has made a major difference in how he feels about himself. I would never take those things away from them.

I didn't get to be activites until I was a teenager and I dealt with low self-esteen and I don't want that to happen to them.

For what its worth - if you have a Dollar General or Family Dollar in your area (not a Dollar Store) - they have zhu zhu pets for about $2-3 each - as well as every other toy you can imagine; barbie, Littlest Pet shop, Nerf, skates, etc. I was in my local Family Dollar just the other day buying laundry detergent (its cheaper to get my Gain there! ) and had to go down the toy aisle on my way, seeing all the name brand toys as I passed. Tons of items for alot less $.

As far as your parents buying 90% of your childrens clothing - while that may not be an issue to you or your parents, it will be for your Ch. 13 plan unfortunately. You have to show clothing in your schedule and budget, IRS standard is $25 per person - not alloting the appropriate amounts for clothing - which is a necessity - is going to be questioned as much as someone that would allot too much. Remember you have to account for everything you pay / buy during the course of an entire year, and break it down over X amount of paydays, then budget accordingly, setting that money aside each month for bills due throughout the year.

Dance class / karate class - going to be very hard pressed to push that through with the reasoning you're using I think. While its important for children to have physical activities, its not mandatory that they be in some sort of class to do so, its considered non-essential. You might be able to get away with karate for your son given he is 8, however dance classes for a 2 year old I believe will be questioned.

Insofaras your child having low self esteem and being dyslexic, while this may sound harsh, its not meant to be - I'm playing devils advocate for a moment - your trustee may tell you that the class will not resolve your child's low self esteem issues, that is something that parents, family and friends can do on their own by positive reinforcement as well as counseling / therapy - especially since you are a teacher. We, as parents, hate to see our children suffer in any manner and would move the world and then some to alleviate anything and everything that upset, harm, or anguish our children - but throw a trustee into the mix, and they're not looking at it the same way we are. They're looking at dollar signs and creditors views - and while you may state that instead of therapy / counseling, the karate class is doing the same thing... the trustee might not see it that way.

The other question I would ask my attorney if I were you, is why are you filing Ch. 13 to begin with? If your parents are purchasing your children's clothing and any other items that are considered "needs" and not "wants" - then perhaps you actually qualify for a Ch. 7 and not a 13. ??

Some things to consider before you actually sign anything. Wishing you all the best!

[Cristo]

Melody,

The thing to keep in mind is that you will have to provide your bank statements to the Trustee for the couple of months before you file and maybe until the 341. What, if anything they look at is highly dependant on the Trustee and what state you are in. I am in Maryland and really all they looked at is what my final balance was. It is nerve wracking to think that someone is combing through your statements, but how much they question varies widely. Sounds like the paralegal thinks they take a close look. To be safe, don't use your debit card at the toy store, etc. that's about the only way they would know what you are spending on, or large cash withdrawls that you can't explain what you spent it on. Maybe ask your parents for a loan of some cash and pay them back later if you really want to buy the gifts. If you file mid Nov. your 341 will be right around Christmas so that is bad timing, unfortunately.

After your confirmation I would not worry too much about the bank statements, but again your lawyer would know best on how closely things are looked at in your district.

[ShooFly]

Hi Melody... I agree with the others here. I know you don't really want to hear that We've all been big spenders which got us here. I think it would do you a lot of good to have a heart to heart with yourself. The things you listed that you HAD to get for your kids is not reasonable even to ME, a fellow ex-spender! Our society has us so pumped full of commercialism, and most people fall prey to it. Think about the psychology of it, it's all a money machine! Are your kids rooms currently FULL of toys and clothes, most of which they are not using? They really will learn to live better with less things. My grandmother grew up with 1 doll, and she cherrished that doll and learned to sew to make clothes for it. Then 50 years later she made my gorgeous wedding dress when I got married. You will find better things to do "together" with your time. Family time is priceless and free. So all those presents may make YOU feel like a better provider, but the kids will only remember most of it through pictures when they are all grown up. It's the TIME they will remember and the skills they learned along the way, and not so much the "things".

[olivies]

One word: Layaway. Then you have no problem.

[MelodyAM75]

Well, I will have to agree to disagree with those who think my Christmas budget is too much. If I were buying my kids 4-wheelers and such I would understand, but they don't have things like that. I routinely get their clothes from Ebay and my Mom finds them things at The Salvation Army thrift store all the time and that's no problem for me. I won't be buying Dollar Tree toys because those toys break within hours of getting them. Unfortunately, my parents didn't spend time with me as a child and expressed their love through gifts so I have a tendency to want to get my kids things. My parents also express love to my kids through gifts as well...my dad has only hugged my daughter once that I can remember, but he buys her dresses every month becuase she loves getting new clothes. The last time I my dad hugged me I was probably 4 and the last time I hugged my mom was when I was 19 and my older brother died in a car accident.

However, I DO spend time with my kids and hug them and show affection unlike my parents. My kids don't get toys, movies, etc. throughout the year so birthday and Christmas are special occassions. My Mom got my daughter a lot of Fisher Price dollhouse accessories she found new in packages from a thrift store so I do want to get her the $50 doll house to go with them and I know she will play with it for years to come. My 2 kids rooms are not overflowing with toys. I routinely donate things they outgrow. I try to get them only things I know they will really enjoy and play with. I plan to shop sales and use coupons, discount codes, etc. to get good deals on the things I plan to get them for Christmas. I am a thrifty shopper and never pay full price for anything, but manage to get nice things for a little bit of money. Recently got my son 2 new winter shirts (he's outgrown his clothes from last year) and my daughter a dress and two pairs of shoes (she's outgrown her winter shoes) all for about $30.00 at the mall. The things were on clearance/sale and I had store coupons. I never buy holiday decorations and such until after they go on clearance after the holidays for about 75 percent off. I know I am not a the best money manager or else I wouldn't be in debt, but to be fair a lot of my bills are medical bills left from my daughter's month long stay in the NICU when she was born 9 weeks early and from her heart surgery when she was a year old. Also, my husband works on commission and business has been slow so that has lead to problems. I am trying to get my finances under control and cut up my credit cards a few months ago before I had even considered bankrupty. I work as much as I can freelancing, but I have fibromyalgia and sometimes just can't find the energy after teaching all day, taking care of kids and doing assignments for an online class I am taking (getting another master's degree with a scholarship I won). My coworkers think I am like the energizer bunny at work, but they don't know I sometimes collalse into bed by 7pm at night. I am doing the best I can and will continue to do the best I can for my kids.