Chapter 13 bankruptcy is a common step to take when debt becomes unmanageable, as it provides an opportunity to redistribute what you owe and set up a payment plan over three to five years. However, without an effective strategy in place, ensuring your own success can seem a little daunting. Luckily, a few simple techniques will help you stay disciplined and successfully move toward a debt-free future.

How to Successfully Manage Chapter 13 Bankruptcy

1. Set a Budget

Create a list of your monthly expenses, such as housing payments, utility costs, groceries, and gas. Compare it with your monthly income and make adjustments where necessary. Trimming down costs is the easiest way to prevent overspending. 

Anything that’s leftover should go directly into a savings account for emergency expenses or future use. Once you're financially solvent again, you will have learned valuable discipline that will continue to benefit your life.

2. Ask for Accountability

Having someone regularly check in on your progress will supply a natural motivation for making the payments on time. This could be a close friend or relative who’s good with organization. 

Ask them to call or text a few days before the payment is due to help you get in the habit of monitoring each account. Though calendar and email alerts can serve as reminders, having another person hold you to account will provide extra motivation. 

3. Limit Credit Cards

Every credit card has a different account and due date, which can make them difficult to track. Using only one or two cards on a regular basis will simplify the process and prevent you from missing a payment. Keep your other cards open, even when they’re not in use, as closing them completely can cause your credit score to drop. 

4. Stay in Touch

If there are any changes that might affect the payment plan, such as income, medical needs, or day-to-day expenses, let your bankruptcy attorney know. They'll go over the terms of the agreement and make the adjustments necessary for staying on track. The same goes for selling major assets, as these will also have a direct effect on the payments.

Get on the path to being debt-free by connecting with Pearce Law Firm in Foley, AL. The firm has been in the business since 1998 and is well-versed in all federal, state, and local laws that pertain to Chapter 13 bankruptcy. Their lawyer firmly believes in keeping clients informed and will discuss all the options that are available to you, taking into account the unique characteristics of your case. Call (251) 971-2676 to schedule a consultation or visit their website for additional information on their services.