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Go on Holiday while Bankrupt
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Go on Holiday while Bankrupt

Go on Holiday while Bankrupt

You can go on holiday if you are Bankrupt. However the difficulty you will face is finding the money to pay for it.

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Can you go on Holiday if you are Bankrupt?

If you live in England or Wales there is nothing to prevent you going on holiday or travelling while you are bankrupt. Generally speaking you do not have to tell the Official Receiver (OR) that you will be away from home for a week or two.

You can even travel abroad if you like with no issue. You are not going to be stopped at the airport because you are bankrupt.

The only time it is important that you do inform your OR is if you are planning to be away for an extended period. The OR must be able to contact you if they need to.

If you go Bankrupt in Northern Ireland you need to get approval from the Official Receiver and the High Court in Belfast before you can travel abroad.

How can you pay for a Holiday if you are Bankrupt?

Once you are bankrupt you will have little or no access to credit. It is therefore unlikely you will be able to borrow money to pay for a holiday.

As such an alternative option is to try and save the money you need. Once your living expenses budget has been agreed you can spend or save it as you wish.

You are allowed to keep any money you save from your budget. However you will not normally have a specific allowance for saving towards a holiday. Therefore it will not be easy but you might be able to save something.

You will normally have specific amounts in your living expenses for entertainment and emergencies which you could put aside and use to help pay for a holiday if you wish.

Can someone else pay for you to go on Holiday?

You may be lucky enough to know someone who will pay for you to go on holiday. There is absolutely no reason why they cannot do this while you are bankrupt.

However the money must come from their funds. If you are living with your spouse or partner they can pay for the holiday as long as this is done out of their own income.

If someone else wants to pay for your holiday there is nothing to stop you taking them up on this offer. However it is normally best if they pay for the trip directly. If they were to give you the money it might be mistaken as a windfall which would then have been given to the Official Receiver.

If a friend or family member offers to lend you money you can take them up on this offer. However you are not allowed to start paying them back until after you are discharged.

Can you take a Holiday you Paid For before you went Bankrupt?

If you already paid for a holiday before you went bankrupt it is unlikely that there will be a problem with you taking it. Even if it cost a substantial amount it will normally be impossible for you to cancel and get a refund.

As such the Official Receiver (OR) has no incentive to stop you taking the break. Having said that if you have only paid a deposit you are unlikely to be able to afford to pay the balance from your own money.

Any surplus income you have available will have to be handed to the OR. As such you will simply lose your deposit unless someone else is able to pay the outstanding balance for you.

Be careful about paying the balance for a holiday just before you go bankrupt. Using credit to do this it could be seen as irresponsible borrowing. Using cash instead of giving it to the OR could result in your bankruptcy being extended.

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4 thoughts on “Go on Holiday while Bankrupt

  1. John D says:

    It’s sort of related to holidays. I’m considering going bankrupt because due to bad circumstances last year I ended up in a spiral of debt as I was trying to avoid dealing with these circumstances. Before this issue last year I was very good financially and had an excellent credit rating, unfortunately this meant that all my credit cards had high limits. I used to pay in full until I lost control and the high limits meant that I could just keep putting off dealing with it month after month until it became over £30k.

    But two of my cards earned miles (Avios) and hotel points. One was the British Airways blue Amex and the other was the IHG (Crowne Plaza) Visa card. It would be nice that once bankruptcy is over I’d still have these hotel and airline points.

    So: 1. Can the credit card provider take the miles off the airline/hotel group? 2. If the card provider can’t take the miles can the official receiver (do they have value?) 3. Will the card provider tell the hotel/airline that I’m bankrupt and therefore affect any loyalty benefits I receive.

    1. Hi John

      I think you will need to have a good look at the terms and conditions of the Avios points agreement. I am not familiar with it but I would assume that in a case where a debt on the card is not paid Avios then reserve the right not to honour the points built up. I am not 100% sure on this but I would not be surprised.

      If there are no such clause in the contact I assume that you would retain the points. However as you say on going bankrupt any value the loyalty rewards have would pass to the Official Receiver as part of your assets. As a result you would not be able to use them.

      My best advice would be to assume that if you go bankrupt one way or another you will lose the value you have built up in earning these points.

  2. Pete says:

    Hello. I am self employed and my earnings come april for the year 2017 to 2018 will be about £7000 last years was £6340.

    I have debts on credit cards of £18000. Am a private tenant as I lost my house 10 years ago through bankruptcy (CAN’T BELEIVE I’VE GOT IN TROUBLE AGAIN. I rent a taxi for work so I don’t own a car.

    I have 4 mobile phone contracts in my name 3 off them are for my wife and two teenage boys although there bills come out off my bank account. I am also the lead name on a family hoilday although my wife and kids and my mum are paying for this as I have no money or credit left.

    At the moment am paying minimum payments on about 10 credit cards and using the money left on them after interest to live on. obviously this amount is getting smaller every month.

    Am thinking about plodding on for a few months and then going bankrupt around the end of May. Any advice on the mobile phones hoilday and everything else in general i would be very gratefull. Thanks for your time

    1. Hi Peter and thank you for your query (below).

      From what you have said it sounds as though bankruptcy would be a sensible solution for you to consider. Given you are not a home owner and have no other significant assets you have nothing to lose. However given you are likely to have zero disposable income and your total debt is less than £20,000 I would also suggest investigating a Debt Relief Order which at £90 is far cheaper to implement.

      That said I would say the following about your mobile phones and holiday: Firstly if you are a self employed Taxi Driver your mobile phone should be one of your business expenditures. As such it should not normally be included in your personal expenses figures. The phone in your wife’s name should not be a problem. In terms of the ones you have for your boys these will be acceptable as long as they are giving you the money to cover the payments each month. The contracts will simply continue. If you are paying for this it might be more of an issue. However you might get away with it as long as the payments are no more than £20/phone/mth.

      In terms of the holiday you do not need to worry. The fact that it is in your name is irrelevant. As long as it is being paid for by someone else there is no problem.

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