Can I Go on Vacation While Filing for Bankruptcy?

Filing for bankruptcy is an acknowledgment that your bills are beyond your ability to pay and that you need help. While there are few life experiences that more clearly reflect a need for a physical and emotional break, that does not necessarily mean that taking one is in your best interest or creates the best impression for the bankruptcy judge and trustee overseeing your case. The question of whether you can go on vacation while filing for bankruptcy comes down to the type of bankruptcy you’re filing for and the type of vacation you’re considering taking.

The first real question is whether the vacation you’re considering taking is a luxury trip. If, for example, you’re considering a trip overseas, it will almost automatically be considered a luxury, and any luxury expense incurred within three months of filing is considered bankruptcy fraud. There’s a very good chance that any debt you incur in that period or during the three-to-four months it takes for the bankruptcy process to be completed will not be discharged.

If, on the other hand, you’re thinking of piling your kids in the car and going off to stay at a friend’s beach house – with no rental fees and paying for your food in cash – then you should be fine as long as you don’t miss any meetings or deadlines and you can afford what you spend. Likewise, if you paid for a nonrefundable trip long before you got into financial trouble, you should be able to go – but it’s not going to look good. If the trip is refundable and you’re filing for a Chapter 7 bankruptcy, there’s a very good chance that you’ll have to liquidate whatever tickets or vouchers you have and relinquish the refunded money to pay off your creditors.

If you filed for a Chapter 13 bankruptcy, things are a bit looser with regard to taking a vacation. Because you are not looking to have your debts discharged, but rather diminished or reorganized, you have a better chance of getting away for a much-needed break. Just make sure that you are paying your bills and that being out of town doesn’t interfere with any of the bankruptcy proceedings. And since you’ve indicated that you can’t pay your existing debt, it’s not a good idea to book anything too exorbitant. Stick with something manageable that won’t create greater debt.

For answers to their questions about how a bankruptcy filing will affect you, contact our experienced attorneys today.