My newest colleague in the Bankruptcy Law Network, Adrian Lapas, discussed the critical importance of developing a budget in connection with a Chapter 13 plan.  Spend the plan payment on something else and your case may be dismissed.

Budgeting for your post filing life is made more complex by a number of factors:

• Many people underestimate the actual  cost of transportation, health care, and running a household
• The official bankruptcy form for budget includes no line item for vacations, birthdays, Christmas, or the routine replacement of appliances and soft goods
• Debtors have been doing without everything that can be postponed in an effort to pay their debts
• The little things have become “standard” in people’s lives and add up:  cell phones, meals away from home, manicures, hi end cable

My charge to my clients is to figure out where the money needs to go and to rethink  what is essential.  What is at stake, often, is keeping the house, discharging the debt, and saving for emergencies and retirement.

First things first.