There are lots of activities that financial advisors and attorneys warn against while filing for bankruptcy. For example, you don’t want to pay back any personal loans in the 90 days leading up to your bankruptcy petition. Charging up your credit cards can be considered fraud in some cases. Your bankruptcy case can be dismissed if the court deems you unworthy and you may not be able to file again on current debts. However, whether it’s wise to travel while filing for bankruptcy is a different matter.
Prior to Bankruptcy Vacations
Vacation prior to filing for bankruptcy are legally acceptable. If the vacation was already paid for and you weren’t experiencing financial difficulties when you paid for it, this is acceptable to the courts. People often book pre-paid vacations well in advance. Their financial outlook could have been totally different at the time, but things can quickly change.
In the case of a pre-paid vacation, it is safe to take and if you can prove your finances were stable at the time you booked it, your bankruptcy case won’t be affected. Consent from your bankruptcy trustee is not required.
What Precautions Should I Take?
While you can travel, even on a luxury vacation, taking the following steps can help avoid complications in your bankruptcy case:
- Don’t use any credit cards, as extra expenses will be questioned in regard to your case.
- If traveling overseas, obtain your trustee’s consent and provide any information they request.
- On the travel request form, list your reason for travel, departure/return dates, destinations, contact details, and payment information.
A trustee can refuse your travel request if they believe you are not complying with your duties under the Bankruptcy Act. All requested details about your income and assets must be provided before filing for bankruptcy while your payment installments must be up to date. Traveling overseas without permission is a violation of the Bankruptcy Act; your bankruptcy can be extended for five years from your return date; imprisonment is another possibility.
Bankruptcy and Passports
In the U.S., you won’t be denied a passport due to bankruptcy. However, international travel can be considered a source of debt or an extravagant expense. Passport denial is typically associated with those who have unpaid back taxes or child support. But medical bills or student loan debt aren’t likely to get you denied. Although if you need medical care in another country and have high medical debt, you could be denied care.
The state department can deny your passport application if you owe more than $50,000 in back taxes. Your denial may not be lifted until 90 days after you pay them off. A passport may also be denied if you owe more than $2,500 back in child support. The debt must be settled before you can be removed from the Passport Denial List, whether by paying the past due amount in full, establishing a state court ordered repayment plan, or repaying the debt as part of a Chapter 13 bankruptcy plan.
Learn More from Oak Tree Law
Whether or not planned travel has the potential to impact your bankruptcy case, Oak Tree Law can advise you on the best actions to take. Large amounts of debt can create a difficult financial situation. While often misunderstood, bankruptcy can be a positive solution when navigated carefully and with the help of a skilled bankruptcy attorney in Los Angeles. At Oak Tree Law, we can help file your case and get you on track to regaining control over your finances. Request a free evaluation online or call us at 888-348-2609 today to speak with our bankruptcy lawyer.