June 8, 2021

Budgeting after Bankruptcy made simple

Bankruptcy offers many people around the country hope for their financial future. While many people turn to bankruptcy in serious circumstances, it also provides an opportunity to rebuild your finances. Focusing on the basics of budgeting after bankruptcy helps with this process.

Working with bankruptcy lawyers allows you to handle bankruptcy proceedings well and to plan for your life afterward. Our team at the Law Offices of Michael Alan Siddons can help you navigate the process of building a budget after bankruptcy.

Make a New Budget after Filing for Bankruptcy

You may or may not have had a household budget before filing for bankruptcy. However, if you filed for any form of bankruptcy — including Chapter 13 bankruptcy — it may be time to reassess your budget.

Fortunately, setting up a new budget post-bankruptcy allows you to plan for your financial future. You can begin by dividing your expenses into the following three categories:


Fixed expenses are expenses that occur regularly. They are always the same — or close to the same. For example, a mortgage payment or a car payment would be a fixed expense.


Variable expenses are also monthly. However, variable expenses vary from month to month. Your grocery bills, credit card bills, or utility bills are examples of variable expenses. These are the expenses you should aim to reduce in your budget.


Finally, irregular expenses do not arrive on a monthly schedule. Instead, they are unpredictable. Medical expenses associated with an injury are an example of an irregular expense. You should arrange these expenses onto a spreadsheet.

Design a Budget Spreadsheet

A household budget allows you to track your expenses, find out where you spend money and focus on saving money. Making a physical document often helps people stick to a budget. You can also use programs like Excel or Google Sheets to make a spreadsheet. An example spreadsheet could contain information like this:

ExpensesYour BalanceMonthly PaymentPayment DueDate Paid
Rent$1,500$1,500May 1stMay 1st
Car Bill$15,400$450May 15thMay 15th
Rental Insurance$100$100May 29th May 29th

These are only a few examples of expenses to list in your budget. All your household expenses should go into your budget. You should add up all the expenses you face every month, ending up with a final number that should correlate to your bank account.

After you record your expenses, make sure that you mark down your monthly income. Do not include any funds taken by your employer for taxes or deductions in that amount. Now, you can compare your income with your expenses.

Funds left over from paying expenses can go into a savings account. A budget helps you save money and build an emergency fund after you file for bankruptcy.

What Is the Difference between Chapter 7 and 13 Bankruptcy?

You have options when it comes time to file for bankruptcy. Chapter 7 and Chapter 13 are two common forms of bankruptcy. However, these two forms of bankruptcy come with different conditions and benefits.

Chapter 7 usually takes significantly less time than Chapter 13. It also does not require you to make monthly payments. Additionally, Chapter 7 may take less paperwork. Discuss which type of bankruptcy suits your situation with an experienced bankruptcy lawyer.

Learn More about Budgeting after Bankruptcy

Budgeting after bankruptcy allows you to work to rebuild your finances. This is a great time to create a budget, track your expenses, and start fresh. You can learn all about filing for bankruptcy and recovering afterward with guidance from Michael Siddons.

We can assist you with both Chapter 7 and Chapter 13 bankruptcy. Learn more by calling (610) 255-7500 or completing our online contact form.