Another Vacation Question

[mlsmket7]

Have not filed yet. Tax return (sizeable) and booked our family of seven for a vacation. Airfare and hotel is, essentially, all paid for. We have just used our debit cards, and have absolutely NO credit cards at all...they're what we are filing on.

I plan on filing within 60-90 days, depending on whether or not this Cavalry Portfolio Svcs law suit on an NFCU card goes through. If it does, and I default, presumably I might face a garnishment. In an ideal world, they back off from the law suit as my attorney said he would call them and see if they back off.

If they DO back off, great.

But, if they don't, and I want to file to avoid the garnishment, what about the vacation that's booked and paid for in a non-refundable format?

[LSUTiger32]

You booked a vacation on the verge of bankrutpcy? Uh.....what did your attorney say about the vacation? I understand it is non-refundable but you may be able to sell the plane tickets and hotel reservations to someone else. Everything else still costs money. I would imagine you should be looking for a way out of the vacation but your attorney would be a better person to ask.

[backtoschool]

The trustee will be looking at every large deposit and withdrawal out of your account in the last six months minimum (many districts, like my district look back one year) The trustee will see the expense and ask about it, but since it was not on a credit card and not to an insider there is little more the trustee can do about it other than grill you a bit.

If there are a lot of expenses like that going in an out of your account, then your case could be dismissed due to "totality of circumstances". What that means is if there are a lot of optional, luxury expenses, then the trustee may determine that you have enough money to pay your bills at least in a chap 13, or without any bankruptcy protection.

[albacore44]

The trustee will be looking at every large deposit and withdrawal out of your account in the last six months minimum (many districts, like my district look back one year) The trustee will see the expense and ask about it, but since it was not on a credit card and not to an insider there is little more the trustee can do about it other than grill you a bit.

If there are a lot of expenses like that going in an out of your account, then your case could be dismissed due to "totality of circumstances". What that means is if there are a lot of optional, luxury expenses, then the trustee may determine that you have enough money to pay your bills at least in a chap 13, or without any bankruptcy protection.

thats not necessarily true. My district is herding people through like cattle, and the Trustee is not asking for bank statements.

still, i wouldent want to have to disclose that i booked an extravagant vacation on the eve of BK. you better wait to file, and have your attorney bluff cavalary into thinking you will be filing soon.

[mlsmket7]

We're in IN, so I'm not sure how strict/lenient the trustees are up here. I've seen everything posted.

Even: http://www.bkforum.com/showthread.php?t=22811

If the above is true, do I just need proof of balance?

[LSUTiger32]

Forget about what the TT will allow. You are filing bankruptcy and going on vacation? I would think that you probably have other things going on right now that you can use the money, no?

[mlsmket7]

Admittedly, I had hoped to not file, but to just try and sustain the 7-10 years of bad credit as the charge-offs fell off. Bad idea I know. I had entertained the idea of filing and even paid a retainer over a year ago.

Now, 3 weeks ago, we book this vacation for the first week in June and this Cavalry Suit surfaces. (This is their second attempt, their first one was a suit against me for an account I had absolutely nothing to do with...thrown out) It regurgitated all of the fear and anxiety. I've called and really have no recourse in getting money back.

I can do car repairs, pay off insurance, kids need glasses and braces (but that's 2000...what would they say about braces?) We have five kids, so we can stockpile food and clothes.

I just don't know what to do!

[LSUTiger32]

Admittedly, I had hoped to not file, but to just try and sustain the 7-10 years of bad credit as the charge-offs fell off. Bad idea I know. I had entertained the idea of filing and even paid a retainer over a year ago.

Now, 3 weeks ago, we book this vacation for the first week in June and this Cavalry Suit surfaces. (This is their second attempt, their first one was a suit against me for an account I had absolutely nothing to do with...thrown out) It regurgitated all of the fear and anxiety. I've called and really have no recourse in getting money back.

I can do car repairs, pay off insurance, kids need glasses and braces (but that's 2000...what would they say about braces?) We have five kids, so we can stockpile food and clothes.

I just don't know what to do!

I hear ya, I mean it is going to be tough to dump them but someone might buy the tickets and reservation at a discount. Try EBay or something. All of that other stuff you mentioned is fine, none of those things are luxuries. Are you only thinking of filing because of this lawsuit?

[backtoschool]

thats not necessarily true. My district is herding people through like cattle, and the Trustee is not asking for bank statements.

still, i wouldent want to have to disclose that i booked an extravagant vacation on the eve of BK. you better wait to file, and have your attorney bluff cavalary into thinking you will be filing soon.

Your district sounds like the exception to the rule albacore44. Most districts ask for at least six months of bank statements. Like I posted above, my district asked for a year of bank statements.

I agree with you that the OP should wait a bit to file.

[DeadManCrawling]

One possible concern:

If you get the wrong question at your 341, there might be further scrutiny by the trustee. That question would be:

When did you first meet with a bankruptcy attorney?

It was asked of nearly everyone at our 341, and was used as a "totality" cause in one that I recall. Essentially, the trustee presumes that you knew you were insolvent, then met with a BK attorney, and THEN took a nice family vacation.

Since it was paid in cash, I don't know if it could be used to cause a problem for you.

Just wanted to point it out. It probably won't come up at all, but every possible preparation is worth considering.

[Dst1]

DMC. A great point about the meeting with the lawyer. This is why I think it's sound advice that you should never meet with a lawyer until you 100% know you must file. Don't go see a lawyer to talk through options. Up until that time you see a lawyer you can maintain some slim cover of plausible deniability. But once you meet with a lawyer and then go on a big vacation...does not look good at all.

[mtbc]

I didn't have to supply any bank statements either. Though, we'd anticipated the possibility of having to file, so there wouldn't have been any bad surprises there.

[mlsmket7]

Is the request for statements on an individual trustee basis, or on a state-by-state basis?

[mlsmket7]

One possible concern:

If you get the wrong question at your 341, there might be further scrutiny by the trustee. That question would be:

When did you first meet with a bankruptcy attorney?

It was asked of nearly everyone at our 341, and was used as a "totality" cause in one that I recall. Essentially, the trustee presumes that you knew you were insolvent, then met with a BK attorney, and THEN took a nice family vacation.

Since it was paid in cash, I don't know if it could be used to cause a problem for you.

Just wanted to point it out. It probably won't come up at all, but every possible preparation is worth considering.

By paying in cash...dumb question...does a debit card from checking count as cash?

[ItsJustMe]

I was a bit concerned that we would be questioned for some out of state expenses (3 seperate out of state visits, 2 clear across the country). No one said a thing. Our whole 341 was basically when did you last use credit, do you believe you are upside down on your house, good luck to you.