The short answer to this question is yes, but with caveats. However, the requirements for Chapter 7 and Chapter 13 Bankruptcy are different, so we’ll discuss each of them separately.

Chapter 7

In Chapter 7 Bankruptcy, you file papers with the Bankruptcy Court asking for immediate protection from your creditors and ultimately for an elimination (discharge) of most debts. The rules surrounding this are quite stringent.

Because many of your debts will be discharged, you are expected to disclose and have the trustee liquidate any non-exempt assets. You will have filed paperwork showing that you literally can’t pay your creditors; therefore, you can’t rack up new debt.

• If you charge any luxury goods or services in the 90 days before you file for bankruptcy, knowing full well that you will not be able to pay for them, it is considered to be bankruptcy fraud and the creditor can ask the court to declare the debt not discharged.
• Is a vacation a luxury? Although you are probably under an enormous amount of stress and feel that a vacation is a necessity, you should not charge a vacation while you are in the 90 days before filing or while you are in the middle of your bankruptcy case.
• However, if you paid for a nonrefundable trip a couple of years ago when you had disposable income, and if you can prove that to be the case, you could certainly go on that trip, although the optics of doing this may create issues with your filing and could result in a Trustee assigned to oversee your case to pursue a bad faith denial of discharge.
• Any spending that you make while on the trip is at risk of being non discharged at the end of your bankruptcy if you use credit cards, and you will certainly be questioned. You may use a debit card or cash.
• You do have to make sure that you don’t miss any important deadlines or your 341 meeting of creditors, which must take place within 60 days of filing.
• If you have refundable air tickets for a flight, you may have to surrender them to be liquidated and for the money to be distributed to your creditors.
• Can you drive out of state to visit your grandmother? Yes, if you can afford it. (Maybe Grandma misses you so much that she is willing to pay for gas.)

Since Chapter 7 Bankruptcy generally takes only a few months (typically 3-4 months in Indiana) for your debts to be discharged, you may want to wait before thinking about vacations. When you have your fresh start to begin paying bills again and looking to the future, you can start saving.

Chapter 13

Chapter 13 Bankruptcy is different from Chapter 7 Bankruptcy because you will be on a court-mandated payment plan to repay most of your debts. This will make it easier for you to take a vacation. As long as you are successfully making your monthly payments to the trustee on the schedule you all agreed to, you can travel or vacation to your heart’s content — with three important provisos:

1. You cannot miss any meetings or deadlines.
2. You must be able to afford whatever you spend. Since the payment plan has been carefully worked out to apply everything you earn except for basic necessities to go to your payment plan and creditors, it will be hard for you to afford any extras.
3. For the 3-5 years that you will be on a budget and payment plan, you can’t take on any new significant debt without the approval of your trustees, which means that a once in a lifetime cruise around the world is not happening, so keep your expectations in check. Any vacation must be financially feasible within the bounds of your payment plan.

After your debts have been discharged, you may face an onslaught of credit card offers, and you will then be free to use a credit card to book hotel rooms and rental cars, but you want to rebuild your credit, and you can only do that by paying off your bills faithfully.

Traveling Abroad

Don’t do anything without consulting with your attorney. You don’t want to affect your bankruptcy proceedings or to be thought to be acting in bad faith. In most cases, you won’t have a problem applying for a passport, but there are some exceptions:

1. If you owe more than $2,500 in back child support, you may be denied a passport.
2. If you owe more than $50,000 in back taxes, you may be denied a passport.
3. International travel is considered to be a luxury.

Every case is different. For example, you may want to know if you can travel to visit a sick relative or to attend a funeral. An experienced bankruptcy attorney can answer all of your bankruptcy-related questions and work with you to navigate the process.

At Sawin & Shea LLC, we understand that hiring an attorney to help you file bankruptcy is scary. We are committed to providing compassionate and non-judgmental representation to all of our clients. Our attorneys have helped thousands of people just like you get the fresh start they deserve. We are here to help.

Schedule a FREE consultation with an attorney to review your personal situation.

(317) 759-1483