As you may have read, one of the practical implications of the October, 2005 changes to the bankruptcy law has been to "push" debtors away from Chapter 7 and into Chapter 13.  Chapter 13 is still a form of bankruptcy and it is a very powerful tool, but you need to be very careful at the outset of your case to make sure that you and your lawyer create a liveable and reasonable budget.

Clark and Washington sees dozens of clients each month in our five Tampa/St. Pete offices and our attorneys regularly meet to compare notes and to discuss current cases.   One of the changes that we have implemented in our case evaluation process has been to emphasize to our clients the importance of giving us accurate information about what the client and members of his household actually spend each month.  Chapter 13 lasts between 36 and 60 months and we need to work hard to make sure that we do not commit our client to a Chapter 13 payment that our client cannot afford.

We now suggest that our new clients keep a "to the penny" diary about spending habits.  You should keep this diary for a minimum of two weeks, although 30 days would be better.  You need to write down every penny you spend and keep receipts whereever possible.

Based on experience, we find that:

• most people underestimate how much they spend on food - both groceries and eating out
   
• many people spend $25 to $100 per month on items like cigarettes, checkout line magazine or candy purchases and other items that don't otherwise make their way into a budget
   
• kids are expensive!

If we have receipts and documentation we have resources to argue for a Chapter 13 payment that reflects reality, rather than estimates.  Keeping track of what you spend is always important, but never more so than when you are considering bankruptcy.