Can I Go on Vacation Before Filing for Bankruptcy?

Buchalter & Pelphrey

Although there’s nothing legally preventing you from going on vacation before filing for bankruptcy, you should strongly consider how a bankruptcy court might view your vacation.

For example, any luxury expenses made within 90 days of filing for bankruptcy may not qualify for discharge. This is to avoid situations where people “charge up” their credit cards and take out personal loans they don’t need, thinking they can just get rid of all the debt in bankruptcy.

If your vacation falls within this 90-day period, then you run the risk of having all associated expenses viewed as non-dischargeable luxury expenses. Additionally, your bankruptcy case can be dismissed and you’ll be unable to file again on the same debts, even if there were others unrelated to your vacation in the mix (such as medical debt or an older credit card balance).

What About Prepaid Vacations?

If your vacation was prepaid before you ever intended to file for bankruptcy, the courts generally understand how this situation is different. As a result, going on such a vacation would be viewed with more acceptance than if you were aware of your financial hardship and chose to create new plans in the midst of it.

If you can get a full refund of your vacation, however, it might help you in bankruptcy court. In doing so, you could demonstrate financial competency and that you’re taking your experience with financial hardship seriously. That can go a long way with many judges.

What Should I Do If I Go on Vacation?

You can go on a luxury vacation, but you might want to enjoy it differently if you plan on filing for bankruptcy soon or are already involved in a case.

Here are a few tips to keep in mind:

  • If you are currently in bankruptcy, get consent to go on vacation from your bankruptcy trustee.
  • Limit your credit card use for essential items and services.
  • Fully and faithfully complete your travel request form.

These small decisions can make minimize the scrutiny your vacation draws toward you and your case.

If you need assistance with bankruptcy in any way, you can reach out to Buchalter & Pelphrey Attorneys At Law online to learn more about our legal services.

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