Fishtanks and concert trips – how can these things have anything to do with bankruptcy? The answer actually is they do not have anything to do with bankruptcy! That is the problem: these are perfect examples of expenses that your bankruptcy trustee will not accept if they occurred shortly before your bankruptcy case was filed.
During bankruptcy planning, your attorney may instruct you to only spend your money only on normal and necessary expenses. Examples of these expenses would be things like food, shelter, or transportation. Normal expenses that your family faces are usually acceptable in the analysis. However, your bankruptcy attorney will usually warn you against such things as paying back relatives or paying back creditors in a preferential way. In fact, your attorney will probably give you a whole list of warnings and instructions that describe how to not violate this principle before you file your case.
Over the years, I have found the perfect two examples of unnecessary expenses. First, if you purchase a 5000 gallon fish tank before you file, you will likely be violating this principle. The fish tank has nothing to do with your normal needs and necessary expenses. In fact, it even creates unnecessary future expense for the maintenance and support of this hobby item.
Planning a trip to attend a concert in another state is another perfect example of an unnecessary expense. This expense would be entirely for entertainment value. There are no sick relatives you are visiting in the trip. No business activity will occur during the trip. The trip would be purely for experience and entertainment sake: it has no normal or necessary element to it.
If you were unsure whether an expense will be deemed normal and necessary, you need to always ask your attorney. It is very easy to justify an expense because it is what you were already planning to do with your remaining money. The normal rules to how you spend your money do not apply if you are contemplating bankruptcy. Ask your attorney. You do not need to be planning to do something wrong to make a mistake. If you make a mistake, it probably will not ruin your bankruptcy case. However, as your attorney will tell you, it could make the total “cost” of your bankruptcy increase greatly. You could face being required to pay any incorrectly spent money back to the trustee in your bankruptcy case.