If you are considering filing Chapter 13 bankruptcy, then it is likely you have many questions. One question we often get is whether or not a person who is in Chapter 13 bankruptcy can still enjoy their lives. One example is vacation. Can a person who is in Chapter 13 go on vacation? Keep reading for general advice. If you would like advice that is more specific to your situation, contact The Law Offices of Paul Y. Lee at 951-755-1000 for a free legal consultation with a bankruptcy attorney.
The Basics of Chapter 13
Before we answer that specific question, let us consider what Chapter 13 is. It is the reorganization of your debts. In most cases, these bankruptcies last five years, though three years is also possible. If you are in Chapter 13, then you are required to pay your disposable income to your creditors by making a payment to a court-appointed trustee.
Generally speaking, the amount you have to send will be determined by the amount of debt you have, your household income, and how much your personal and real property is worth. The purpose of bankruptcy is to give people a fresh start – not to punish them.
Schedule J
Every bankruptcy filed in California will include a document referred to as “Schedule J.” It notes the petitioner’s average and typical monthly expenses. This would include obvious things like mortgage, utilities, food, clothing, medical care. However, there is also a spot on the schedule for a “recreational” budget. This allows you to have money for recreational activities – which could include a vacation.
That said, know that all bankruptcies are unique, and there is no fixed amount that you will be permitted to put aside. The trustee of your bankruptcy is going to look at how many people are in your home, your income, and what percentage of your debt is going to be paid through your bankruptcy. Then they will decide what a reasonable recreational expense will be.
For example, if you are a family of four with a $150,000 household income and you are paying 100% of your debt through your plan, then your trustee is likely to be more generous in how much you can put into your recreational allowance. If you have a much smaller budget and are only paying 15% of your debt through your bankruptcy, then it is likely that the trustee would find a significant recreational budget to be excessive.
Once again, if you have questions about your specific case, or if you are interested in a free legal consultation with a bankruptcy attorney, contact The Law Offices of Paul Y. Lee at 951-755-1000 and let us help you through this process.
