As a high-income individual, you may not think that your money behavior contributed to your Chapter 11 bankruptcy. Perhaps you think it was down to a few bad investments, or a business that went under due to the harsh economic climate. Whatever the reasons for your Chapter 11 bankruptcy, it's important to note this one truth: you can always learn from your money mistakes.
If you want to learn how to recover from filing a Chapter 11 bankruptcy, then follow these pearls of wisdom from a top Dallas bankruptcy attorney:
Manage Your Overhead Costs. Like in the business world, there are some expenses that you simply must have - and as an individual, these overhead costs include your shelter, food, clothing, car and taxes. If you want to ensure that your overhead costs stick to a manageable budget, ensure that they don't exceed more than 50% of your budget. If you want to be even more money-savvy, try to budget it down to 40%. After all, with the majority of your future wages promised to your creditors, you'll want to keep things manageable so as to avoid any sticky financial situations.
Build Up Emergency Savings. No matter if you filed for a Chapter 7 , Chapter 13 or a Chapter 11 bankruptcy, building up an emergency savings is an important part of recovering your finances. As the recession showed us, not having emergency savings leaves you vulnerable to a wealth of mishaps, including medical bills , emergencies and other unforeseeable expenses. You may be a high-income earner, but that doesn't mean you don't need those critical emergency savings.
Don't Threaten Your Retirement Savings. You may be tempted to eliminate some of your debts with your retirement savings; but whatever you do, leave your retirement funds where they are. One of the worst mistakes that bankrupt individuals make is to sacrifice their futures just for the sake of getting rid of some of their present debts. It takes a lifetime to build up a healthy retirement account - don't jeopardize your future just to satisfy your creditors. Unless you plan on working for the rest of your life, that is.
Consult a Bankruptcy Attorney. After filing for a Chapter 11 bankruptcy, don't cut off communications with your Dallas bankruptcy attorney ; instead, keep in touch to ensure that your creditors are satisfied with your payment plan. Having a Dallas bankruptcy attorney by your side can make all the difference between smooth sailing and struggling to deal with the realities of a Chapter 11 bankruptcy.