Knoxville Attorney Heather BanksAre you facing difficult financial decisions?  Bills piling up?  Trying to figure out how to pay for Christmas gifts?  As fun and joyous as the holiday season is supposed to be, the money aspect of it can be very stressful.  No one really wants to think about their financial problem especially during this time of year.  This article is designed to help you prepare if you are contemplating bankruptcy in the next few months.

The Do’s and Don’ts

Do: Use some of your federal income tax refund

First, many people find it helpful to file bankruptcy around the time they get their federal income tax refund.  They use the money they get back to pay the fees associated with bankruptcy.  Now, would be a good time to talk with an experienced attorney to find out what cost to expect.

Don’t: Use credit cards

Second, credit card use to make holiday purchases and planning to pay later is not a good idea.  If you are already in trouble with credit cards, charging them just before filing bankruptcy can cause problems when you file the bankruptcy.  It is best to stop using credit altogether and only purchase with cash or from your bank account.

Don’t: Take out high interest rate personal loans

Third, I do not recommend taking out high interest rate personal loans, flex loans, pay-day loans, check advances, etc. to buy Christmas gifts. Regardless of whether you are contemplating bankruptcy or not, it’s not a good idea.  I know it can be hard to make decisions on gift buying, especially if you have children. But, going deeper in debt is not the answer.  These tempting, but dangerous personal loans usually create a never-ending cycle you cannot payoff.  Many of the local loan companies ask for collateral like household goods, electronics, jewelry, or a second lien on your vehicle to secure the loan.

One solution is to look to your community to find organizations like a non-profit or a church that help purchase Christmas gifts for children.  A second is to emphasize the non-material aspects of Christmas such as religious beliefs, community activities such as parades, craft projects to decorate the tree or house and family gatherings.  Again, applying for high interest rate loans to pay for Christmas gifts is a bad idea.

Do: Save all of your financial documents

Fourth, don’t throw away your bills, pay stubs, bank statements, and car statements.  It can be tempting to toss it all in the garbage, but you will need these items if you decide to file a bankruptcy.  If anything, organize them and get a better understanding of how much you make and what it takes to pay your everyday bills.  You can use your time and energy to prepare for resolving your financial problems and even use your talents and skills as gifts to others.  Bake for someone, help fix or repair something for someone, go visit and spend time with those you love and care about.

Do: Contact an attorney

Fifth, if you have not contacted an attorney yet, do so now.  It will put your mind at ease once you know what your rights are and how to fix the financial strain you are in.  All of our Bond & Botes locations offer a free, no obligation consultation with an experienced and caring attorney.


For the Knoxville, Tennessee area, below is a list of a few of the holiday assistance organizations for low-income families:

  • Knoxville- Knox County Community Action Committee- (865) 524-2786
  • Knox County Family Resource Center- (865) 594-1192
  • U.S. Marie Corps Reserves Toys for Tots Program- need to enroll online
  • Salvation Army- multiple locations-
  • Mission of Hope- (865) 584-7571
  • Empty Stocking Fund-
  • God’s Place- (865) 604-8077
Heather Banks
Written by Heather Banks

Heather Ellis Banks is an Associate Attorney at the Bond & Botes Law Offices in Knoxville, Tennessee. She holds a Bachelor of Science from the University of Tennessee Knoxville, and a Juris Doctorate from the University of Memphis, Cecil.C. Humphreys School of Law. She has been helping consumers to navigate through the bankruptcy process since 2005. Read her full bio here.

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