BUDGETING: A KEY FACTOR FOR FINANCIAL SUCCESS
It Sounds Simple
As simple as it may sound, knowing what you make and where you spend it goes a long way to knowing what you can and can’t afford to do. For most people, putting together a budget for the first time is not much more than a guess. When people run out of money, or even before that, they often rely on credit to fund their cash flow shortfalls. As credit balances build or are maxed out, the likelihood of being able to repay them dwindles and the prospect of financial difficulty or bankruptcy becomes more and more likely.
In order to avoid a Bankruptcy or an Insolvency, which needs the services of a Bankruptcy Trustee or Counsellor, it is imperative for you to get a handle on your affairs. Credit Card companies want you to make the minimum payment only, maximizing the interest they can charge you, and extending their gravy train as long as they can. Making minimum payments will retire your debt only if you don’t use the card again, and we know how likely that is for most people to accomplish!
Budgeting if you go Bankrupt
If a person decides to file an Assignment in Bankruptcy, or decides to go bankrupt, one of the duties every bankrupt must perform throughout the period of bankruptcy is the filing of monthly budgets which reflect an individual’s or family’s earnings from all sources, and the details of their monthly expenses by category. As part of the bankruptcy process, it is hoped that the recording and reporting of one’s expenses while bankrupt will help a person recognize where and what they spend their money on, and stimulate or encourage them to make better choices. The Bankruptcy and Insolvency Act dictates how long the bankruptcy and the budget reporting process will continue. The period of bankruptcy, for a bankrupt who fully completes their duties, ranges from a minimum of 9 months for individuals going bankrupt for the first time with nominal earnings, to a maximum of 36 months for a second time bankrupt with significant earnings.
At Cameron-Okolita Inc., our objective is to help our bankruptcy clients streamline the budgeting process while bankrupt.