Can I take a vacation during bankruptcy?

[mama2four]

My husband and I filed chapter 7 yesterday and the 341 meeting is in 20-30 days. We were forced into personal bankruptcy due to the failure of our business. We had been trying to restructure our loans and avoid closing the business since January 2009. Basically, we got screwed by our bank and are even looking into taking legal action against the bank for questionable banking ethics. But, that's another story...

In the meantime, we are wanting to take a vacation this summer. We have four children and want to try and live our lives as normally as possible. The plans were to go at the end of May or the beginning of June. This puts us after the 341 meeting, but just short of the certification of the bankruptcy.

Can we go on vacation during a bankruptcy? At what point will we know what we can and can not spend our mony on DURING the bankruptcy?

Thank you in advance!

[Mensa1]

In theory, yes you can go on vacation or do anything else that doesn't involve the use of credit after you file Ch 7 Bk. What you will want to be wary of is to make certain that the assets you expends, (Ca$h) is exempted from the Bk Estate. Unless you are certain about this I wouldn't advise you to spend a nickel on anything that is not usual expense for necessities.

Also make certain if you spend $$$, that you can document where those funds came from. If the TT gets wind of a vacation they may have a special interest there to make certain that funds weren't hidden from the Bk process. Be extra careful here that you do not invite scrutiny that you will not appreciate, if it happens. So if you cash flow is enough to show that you used x dollars from current payrol and spent on vacation, then you would be ok doing so. Any other expenditure could be real trouble.

Make sure to run this past your Atty and you should definitely understand what you can and cannot spend before doing so. I can't stress this enough...... but I guess I have overstressed it in one way here. Sorry.

[mama2four]

Thank you. I appreciate your comments. I definitely want to do everything by the book and don't want to lose more in the process. I will confirm with our attorney. Thanks again!

[sawdust14]

You may want to consider the appearance that a vacation would present to family and friends who will learn about your bankruptcy. Last evening, just by coincidence, A friend who knows about our bankruptcy related a similar story.

It happened several years ago and involved a family in her circle of friends who were going through some hard times. This friend, along with others, helped shingle their house, etc…, but the family finally had to declare bankruptcy. Shortly after the bankruptcy was final the family took a nice 2 week vacation. It did not sit well with their friends, one of whom used a couple days of his vacation time to help with the roof. I am not making any judgments, just relating a similar story.

[mama2four]

I can see where that would look bad in that situation! I agree and would never even consider a vacation if we were like the family you described.

Fortunately, our situation is not as dire. We have actually started a new business that is in good standing and are able to make an income. Unfortunately, it is our bank loans from the previous company that has put us in this position. The bank has liens against our house and additional property (farming acreage) that we own as collateral to the business loans. We are forfeiting both our property and our home to go towards the bank loans for the business, but it is still not enough to wipe the entire debt. The bank charged high interest rates and would not bring them down in accordance with interest rates throughout the rest of the country and would not restructure the loans, even though we approached them for 10 months in an effort to do so. (We have since learned that the bank has had trouble with banking regulators, FDIC, etc). We truly have become a casualty of their bad banking practices. Our previous business was successful, but we could not afford the loans and the bank knew it.

We are very lucky in that we do not need to rely on family and friends to provide food, shelter, etc. However, after being so screwed by the bank and just wanting to get back to normal, that's why we would like to take vacation. Hope this makes better sense!

[ItsJustMe]

We had 3 out of town trips leading up to or after we filed but before the 341. They weren't 'vacations' per se, and we were prepared to be questioned about the expenses, but no one said a thing. My one concern for you - With lawyer fees and continue to pay on expenses we simply couldn't afford but needed to pass means (mortgage), we were really cash poor around the time of our filing. We could barely buy bread, let alone a 'real' vacation.

[LSUTiger32]

Does it not make you feel a little wierd taking a vacation knowing you are about to default on a bunch of promises you made? We have not been on vacation since November '08 when our financial problems really started. We live life, but you can do that for a year or two without a vacation.

As mentioned, if you have the money to go on vacation just make very sure that the money is reported to the TT. You don't want to deal with the consequences if he finds out that money you did not mention to him was used to take a vacation. It's one thing to go on vacation while you are caught up in thinking that everything is OK, but to go right after you file just seems wrong.

[mama2four]

No, it really doesn't make me feel weird. I make no apologies because the bank has brought this upon themselves and our lawyers attest to that. The bank has lied to us, cross-collateralized our property without fully disclosing what they were doing, and is in trouble with the FDIC for doing this to others, as well as to us. We paid our business loans each month on time. They made almost $400,000 in principle and interest in less than 30 months from our payments, now they have all the business equipment and assets and will get our house and additional 25 acres. That is all of our investments from the last 11 years except for an IRA.

We haven't gone on a vacation for years because we put all our blood, sweat, and tears into our business - which was a good business - it made money. The bank became too greedy and that is why we are looking into a lawsuit against them for bad banking practices. Their actions are forcing us into a personal bankruptcy because we can't afford to pay income tax on the outstanding amount, otherwise we would still have that business and be moving along as usual.

I realize we are probably in a different situation than most people on here because of our circumstances, but we are honest people, who did pay their bills. At least I am wanting to do things by the book and not "sneak" in a vacation right before I file. That's why I'm asking questions about what and how we can legally do things. However, after what we've been through, I wouldn't judge others for what they choose to do though.

I thought the point of this site was to be a forum for questions and answers pertaining to bankruptcy, not to be lectured to and judged by others. Bankruptcy is difficult enough without having to worry that you will be looked down upon by strangers. Strangers who had been in the exact same situation, no less. And, as far as I'm concerned - I deserve a vacation - it's the least we should get out of this!

By the way, thank you to the first two respondents. I really do appreciate your input.

[mama2four]

Thank you, ItsJustMe! I definitely know we couldn't do it now, but by the beginning of June, we should be good. We are able to use 15 years worth of frequent flyer miles and my dad has a week-long timeshare condo that he will generously donate, so our air and accommodations are covered. It would really be rental car, food, and any activities. Our families have been extremely supportive and are just as shocked at how the bank has behaved and what they are legally and illegally able to get away with!

It has been a very surreal experience. We are so shell-shocked by this whole nightmare, that I think we would like to just step away if even for a week. The best time for our summer schedule would be the first part of June, but again, I didn't know if even going away and spending money on meals out and activities would be scrutinized. We would be gone right at the time the bankruptcy should be finalized, but we may need to just put it off for a week or two until this behind us.

Thanks again!

[BCA2009]

If I had borrowed money from family and friends to me get by, I would never go on a vacation without paying them back. But BK has to to with getting a fresh start. Who cares what other people may think.

For those of you who think you shouldn't go on Vacation just as you have been discharged, when would you (or your nosey friends) approve of it? Do I wait one month?, two months?, a year?

If my family has been scraping by for two years trying to pay all of the bills, and now all of the sudden I have a little breathing room and can afford a vacation, it's nobody elses business what I do!

[mama2four]

BCA - thank you for the support!

[BCA2009]

Does it not make you feel a little wierd taking a vacation knowing you are about to default on a bunch of promises you made? We have not been on vacation since November '08 when our financial problems really started. We live life, but you can do that for a year or two without a vacation.

As mentioned, if you have the money to go on vacation just make very sure that the money is reported to the TT. You don't want to deal with the consequences if he finds out that money you did not mention to him was used to take a vacation. It's one thing to go on vacation while you are caught up in thinking that everything is OK, but to go right after you file just seems wrong.

LSU, you are getting too caught up in the emotions. Depending on your state you may be able to exempt 10K or more from the BK estate. In Florida,you could have a million dollar home paid for, and it would not effect your Chap 7 BK. do you think that seems wrong? If you follow the law, (don't hide assests), the trustee has no reasons to give you any problems.

If I was on the fence in areas, like just barely passing the means test, with some questionable expenses. I wouldn't want to do anything to rock the boat and would put off the vacation a little while (after the 341), but if I solidly qualified for BK and had exempt assets, I would spend them as I saw fit for my familiy. I'm way past the emotion/guilt/what will people think stage.

[newbie2]

Mamaof4, go on that vacation and enjoy the time with your family. You've done nothing wrong, and won't be doing anything wrong by going.

We're in a Chapter 13 and haven't been able to leave the state to visit our little grandkids across the country since this all started. Somedays I just sit and cry I miss them so badly. But it is what it is..

Go. Have fun. Life is too short.

[mama2four]

Thanks Newbie. I'm sorry you can't see your grandkids. That is so hard. I hope that changes for you soon. You're right - life is too short!

[MrBankruptcy]

I agree with everyone else take a vacation and relieve all that stress that you will have to go through. Make sure that you document the money that you are using. It would probably look bad if you went on a French Riviera cruise but if you're taking an inexpensive trip, the way I look at it is you have to eat anyway. Many times, after very trying times my wife and myself do exactly that. It will clear your mind and help you get a new fresh look at your future.