The Link Between Holiday Spending and Bankruptcy: What You Need to Know

The holidays are the most wonderful time of the year, but for many families, they’re also the most expensive. No matter which winter holiday you celebrate, you probably expect inflated expenses for the month of December 2025. But that spending can lead to debt, which in turn, leads to bankruptcy. Although bankruptcy is not the financial death sentence that many believe it to be, there are plenty of ways to avoid it being triggered by holiday spending. If your debt situation does get to that point, rest assured that our Las Vegas team is ready to provide counsel and guidance, all with flexible payment options starting at Zero Dollars Down. Learn more today with your free consultation by phone at 702-842-0700.

Link Between Holiday Spending and Bankruptcy legal review

American Holiday Spending

Despite the current cost of living crisis, Americans will be pouring hundreds of billions of dollars into the economy this holiday season. Experts predict that U.S. Americans will spend $311 billion on flights and $242 billion on shopping for the 2025 holiday season. That shopping amounts to 82% of the population planning on buying gifts. On average, they plan to spend $1,107 in total this year, up 17% or $182 from last year. The average estimated spend on holiday travel is $2,586 for this year. About 45% of the country’s population plans to spend on flights or hotels. The majority are concerned with how tariffs will affect the costs of their holiday spending. Some are shopping earlier to avoid extra expenses from tariffs. Holiday travelers are booking on off-peak days and staying with friends and family to cut down on costs.

There is a direct link between holiday spending and credit card debt. It’s strategic to purchase gifts, hotel stays, and airline tickets with credit cards. This allows opportunities to accrue generous points, may come with benefits like airline lounges, and offers the safety of chargebacks and other fraud prevention. But not everyone keeps their credit card spending in line with what they can actually afford. Approximately 31% of holiday shoppers still have credit card debt remaining from 2024, and the same goes for holiday travelers. This is a much higher figure than the 15% of Americans who anticipate spending more than they can afford this holiday season. But spending gets out of control, and unexpected issues arise. If you find yourself in overwhelming credit card debt due to the holidays, bankruptcy provides a means to start over with a clean slate. Schedule your free consultation with our Vegas Zero Down bankruptcy team today by calling 702-842-0700.

Frugal Festivities Ideas

Money doesn’t buy happiness, but it does buy holiday groceries, gifts, and decorations. Some holiday spending is likely unavoidable, but there are various strategies one can employ to keep it to a minimum.

Set price limits: It’s tempting to go overboard while shopping for loved ones during the holidays. But if your household is on a tight budget this year, there’s no reason that this shouldn’t also apply to your holiday spending. Whether you’re setting a budget for new ornaments or gifts for an exchange, this can reduce stress for attendees who may be uncomfortable sharing their financial difficulties. If you have spare funds left over after the holiday, you can use them to buy a present during the sales.
Free is your friend: There are plenty of ways to get into the Christmas spirit without spending a single cent. In a warm state, it’s easier to get outdoors and take advantage of free or nearly-free activities. You can also find parades, holiday markets, and other free events to expend your family’s energy without spending your family’s budget. Karaoke, trivia, and board games can all be a part of a magical holiday night at home.
Try your hand at DIY: Some people are craftier than others, but the holidays are the perfect time to figure out where you fall on that scale. You probably have various supplies around your home that could be repurposed into a Christmas tree ornament or other holiday décor. Getting a group together to craft can be a fun holiday activity in itself.
Cash in your credit card points: If you have a high credit card balance, you might have a good deal of points accumulated. Now may be an opportune time to cash those points in for buying gifts, airline miles, or cash back into your checking account (not your credit card balance.) If you file for bankruptcy to clear credit card debts, those points will be lost.
Consider a side gig during the holidays: During the holiday season, many businesses hire temporary employees with flexible hours. More people also travel during the holidays, increasing the need for services with gig employees like Uber and DoorDash. If you need a few extra dollars to help pay for holiday expenses, these can be a great way to pay them, and maybe even pay off some debt.

Is Holiday Spending a Luxury?

It’s hard to imagine life without fully celebrating the holidays, but how is holiday spending viewed under the law when a person can’t pay their obligations to their other creditors? When a person declares bankruptcy, a trustee is assigned to the case to ensure fairness for all parties involved. One of the trustee’s tasks is to review the debtor’s credit card statements for several months leading up to the bankruptcy filing. Credit card statements are reviewed for cash advances in the 70 days before filing, and luxury purchases in the 90 days before filing. Spending in excess of the applicable limits can result in those credit card charges not being included in the bankruptcy discharge. So is holiday spending considered a luxury, or an expensive seasonal necessity? Where you do your holiday shopping might affect the trustee’s opinion. For example, if you buy your holiday dinner at Fry’s, it will raise less alarm with the trustee than shopping at Whole Foods or going to a fancy restaurant. So will buying presents at Target or Walmart as opposed to Nordstrom and other luxury-brand stores. Big box stores are also favorable because groceries and other household goods can be purchased at them. Keep in mind that gift cards received during the holidays are treated as cash, and may not be protected by bankruptcy exemptions. To discuss your holiday spending plans and how they are related to luxury determinations in bankruptcy, schedule your free consultation with our firm today at 702-842-0700.

Filing a Holiday Bankruptcy in Las Vegas

Most creditors won’t give you more time to pay your obligations just because of holiday spirit. Bankruptcy could become necessary, even during the holidays, to ward off a lawsuit, wage garnishment, or other form of debt collection. Bankruptcy provides peace of mind through the automatic stay, whether you choose to file during or after the holiday season. But it is most effective when filed with guidance from an experienced bankruptcy firm. Don’t make the mistake of assuming you can’t afford quality bankruptcy representation in Las Vegas. Our team starts the process with free consultations by phone, when you can receive an affordable quote for legal representation with post-filing payment options. Take the first step towards a fresh start today with your free consultation by phone at 702-842-0700.