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For some, Christmas debt can trigger bankruptcy

As the holidays approach, many in Arkansas are preparing for annual gift-giving. For those who are already in serious financial straits, however, holiday shopping can be more stressful than jolly. In some cases, individuals and families put off reviewing their full financial standing until the end of the year, as they try to determine how much to spend on gifts and celebrations. The outcome of those reviews may lead some to consider if bankruptcy may be the best way to ring in the New Year. The following tips are offered to those who would like to have a great holiday without incurring high levels of debt.

The first and most important step is to determine a holiday shopping budget. For those with high levels of consumer debt, this often means limiting purchases to those that can be made with the cash that is on hand. That means no credit cards, no short-term loans, no excuses. If there is no money in the cash budget for a certain item, then that gift does not get purchased.

Following a budget is easier if consumers begin with a full list of all loved ones who will receive a gift. Having this list available for review gives shoppers the chance to allocate a certain amount to each person, which in turn helps them to shop for the best possible present within that price range. Those who are able to stick with this approach must avoid impulse buying, guilt-fueled last minute purchases and the relentless message sent by advertisers that expensive gifts are the ultimate expression of love.

The holiday season is about love, community, gratitude and tradition. None of these things require a significant financial outlay, and Arkansas residents are well-served by taking a step back and assessing whether previous spending habits may have taken away from the true meaning of the holiday season. For those who are saddled with unmanageable debt, it may be time to consider of personal bankruptcy is the best way to gain a fresh financial start in the coming year.

Source: whdh.com, "8 ways to plan for debt-free holiday gift shopping", Andrew Housser, Nov. 23, 2015

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