Can I Pay Cash For a Vacation Before I File Chap 7?

[Brian D]

Will taking a vacation put my Chapter 7 in jeopardy? My girlfriend and I are taking a vacation later this month, and since I stopped using my cards in February, she put it on her card and I am paying her back.

[LadynRed]

If there's going to show a large cash withdrawl from a bank account, be prepared to explain where the money went. You also do NOT want to pay your GF back a dime until AFTER your discharge. Your GF is an 'insider', any payments to her would be preferential.

[Brian D]

Yes, from what I read any payment to my GF within 60(?) days of filing will be considered a preferential payment to an "insider" creditor, so they could take it back from her, and distribute it to other creditors.

But I'm thinking I might be okay if I can get the travel agent to reverse the charge on my GF's card and charge my half of the trip to my own debit card instead? After all, I wasn't meaning for my GF to LOAN me the money technically, I just couldn't put the whole trip on my debit, and we never thought to split it between her credit card and my debit card, because it never occurred to us that it could be a BK issue.

Anyway, the travel agent is willing to do that, so I think that would handle the issue of me having her as a creditor, right?

If there's going to show a large cash withdrawl from a bank account, be prepared to explain where the money went.

The only thing I'm still worrried about is whether it's considered some kind of fraud or inappropriate thing to take a vacation before I file, even if I pay cash/debit. I don't see anything about that in my BK books, so if someone can let me know, please do.

Thanks.

[bingo]

You're way overthinking.

Just leave it the way it is . Take your trip and file and upon discharge, pay her back. No need to list her as a creditor since, she is the responsible party if the card is in her name.

The bk code says nothing about vacations. If there is a long pattern of luxury purcahses as opposed to paying bills then, the trustee may make a case for substantial abuse.

Put it in perspective -how much money are you talking about vs the amount of debt you'll discharge.

[Brian D]

You're way overthinking.

Just leave it the way it is . Take your trip and file and upon discharge, pay her back. No need to list her as a creditor since, she is the responsible party if the card is in her name.

The bk code says nothing about vacations. If there is a long pattern of luxury purcahses as opposed to paying bills then, the trustee may make a case for substantial abuse.

Put it in perspective -how much money are you talking about vs the amount of debt you'll discharge.

I appreciate your point, but one big concern is that I don't want my GF to be out the money until however many months until my debts are discharged. Also, if I leave the cash in my checking account instead of paying for the vacation now, I'm afraid of what impact that could have on my filing. What effect does it have if you have money in the bank when you file? Is there a certain amount relative to your debts that is considered excessive and possibly render you ineligible for Chap 7?

I don't want to make things over-complicated, but I don't want to make my GF suffer financially because of my problems, so if the BK court won't look badly on me taking a vacation on my debit card, is there any reason NOT to have the travel agent charge my card instead of my GF getting stuck with the bill for the next couple of months?

The cost of the vacation is about 2% of the amount of my debt, BTW.

Thanks.

[bingo]

Your state exemptions will tell you how much cash can be exempted.

[Methuss]

Be aware that exhorbitant spending right before filing bankruptcy is not looked upon kindly by the courts. You may have to explain it. The card company may also accuse you of attempting to deliberately defraud them. If they succeed in convincing a judge of that, the judge will dismiss your BK with prejudice...you'll not only fail to get a discharge, but you'll be locked out of filing again for years.

[bingo]

I wouldn't go quite as far as Methuss but, there are better ways to handle something like this. That money could be used to purchase assets that are exempted by your state. It could be used to pay legal fees.

I'm the type that believes a real low profile in the weeks prior to filing is best.

It's one thing to tell a trustee that you spent $1000 on new tires and a major auto repair or, dental work or a lawyer and the bk filing fees. It could be another to say I spent a week in Vegas.

If your galpal is not pressuring you for the money I'd leave things as they are.

[Brian D]

So the deal is even if I pay CASH for the vacation I could be screwed, because if I can't show I paid every last available penny to my creditors, I'm somehow 'defrauding' them. It's not enough I wiped out my entire retirement savings for those fuckers with their insane interest and late fees. It's not enough I've done without medical insurance for the last 3 years. It's not enough I bring lunch to work every day and can't even get a decent picture on my TV because I don't even have basic cable. It's not enough I have shoes I haven't worn in 5 years, because I can't even spend the money to have them re-soled. I manage to put away a few dollars and decide to take my first vacation in 10 years, and I'm screwing THEM over. Christ.

Just venting, no need to respond...

[breathing_easier]

So the deal is even if I pay CASH for the vacation I could be screwed, because if I can't show I paid every last available penny to my creditors, I'm somehow 'defrauding' them.

Not every last available penny, just your disposable income over and above your living expenses.

I manage to put away a few dollars and decide to take my first vacation in 10 years, and I'm screwing THEM over.

They way the trustee may look at it is if you could afford to put a a few dollars away for a vacation, then you could have put those same dollars towards paying down your debt. Any reason why this vacation can't wait awhile longer? Or, if your GF already has a lot of non-refundable deposits made (which sounds as if might be the case if you're working with a travel agent) then why can't repayment to her wait until safely past your BK discharge?

[Brian D]

Well I guess I'll just let her treat me to this one as she had intended in the first place.

Good lord, they're going to strip me of my every last drop of male dignity, aren't they?

[breathing_easier]

Good lord, they're going to strip me of my every last drop of male dignity, aren't they?

Nothing wrong with the woman paying, no more than there's anything wrong with the man paying. Still, though, if it's bothering you too much and you decide to file Chapter 7, simply wait until after the discharge to repay her.