I Need to File a Bankruptcy … But How Can I Pay for It? 

October 20, 2022 | By Steffens Law Office
I Need to File a Bankruptcy … But How Can I Pay for It? 

man wondering how he can pay for bankruptcy in LincolnSo, you’re in a tight financial spot. Makes sense – you’re applying for bankruptcy in Lincoln. But there’s a price for applying for bankruptcy and you’ve got mouths to feed – including your own. Groceries alone for the week can climb to $200 and your car payment, mortgage, internet bill, heating and electric, and gas bills are looming on the horizon. You’re working 40-60 hours a week and still are barely floating above $0 in your bank account. What do you do? 

First, Let’s Look at Your Budget. Let’s Get Out a Pen and Paper to Help Us Calculate Where You Can Cut Back:

  • How much money is deposited into your bank account each month? 
  • How much do you spend on housing, utilities, vehicle, insurance, gas, and food? 
  • Any extra money? Where does it go? 
  • Could you live without some of these expenses for a few months? 
    • Entertainment? Clothing? Subscriptions to TV, music? 
  • Do you have any debts that could be discharged with a bankruptcy? (Related: What are non-dischargeable debts?)
    • A personal loan, credit card debt, medical bills, or payments on a car you won’t keep? 
    • A bankruptcy will discharge these loans, so making payments on them is essentially throwing away money!
  • After you make these adjustments, how much money could you put aside each month toward a bankruptcy? A few hundred dollars per month (a couple of credit card payments), will give you the amount you need to afford a bankruptcy in just a few months! 

Next, Let’s Look at Simple Ways You Can Increase Your Paycheck Each Month:

  • Check with your employer about any of these options:
  • Taxes: 
    • Can you reduce your tax withholdings for a short time? It might be more beneficial if you reduce your yearly tax refund in exchange for more income now when you need it.
  • Retirement: 
    • Can you pause your 401(k) contributions for a short time? 
  • Bonuses: 
    • Expecting a bonus soon? You could look ahead to your bonus and plan accordingly. 
  • Check with anyone you trust to borrow from:
  • Do you have any family or friends who’d be willing to give you a loan? 
    • Remember that it’s just temporary and you’ll be able to pay them back when your bankruptcy is over! 
  • Can you borrow money from your 401(k)? 
  • Does your employer have a way to help you cover these costs?

Being in a place where you know you need bankruptcy is a frustrating feeling. Thankfully, we at Steffens Law Office know there’s always hope for a better and freer life away from debt. We would love to help you get there! 

Contact Our Attorneys if You're Considering Filing a Bankruptcy in Lincoln

If you’re wondering if bankruptcy is right for you or if you need help calculating how to afford a bankruptcy, give the team at Steffens Law Office a call at (308) 872-8327 or fill out our online contact form and someone will get back with you shortly.  Our experienced and dedicated staff are available to help you get a fresh new start today!