H1B Visa Transfer Challenges

[infoforme]

I am currently on an H1B visa valid till Sep 2016. And will be leaving my company with a severance package at the end of Jan 2014. I have just started the process of H1-B transfer to a different employer. My wife is also on an H1B visa.
My questions:
1. If my H1B transfer to new employer is denied for some reason can I transfer to an H4 visa status after my current employment ends in Jan 2014?
2. Can I transfer back to an H1B status from H4 whenever I find a job?
3. Do I need to leave the US for any of the H1B transfers?

Thanks,
Aarav

[kabkaba]

I am currently on an H1B visa valid till Sep 2016. And will be leaving my company with a severance package at the end of Jan 2014. I have just started the process of H1-B transfer to a different employer. My wife is also on an H1B visa.
My questions:
1. If my H1B transfer to new employer is denied for some reason can I transfer to an H4 visa status after my current employment ends in Jan 2014? -- Not within the US. You will have to leave and return with H4 Visa.
2. Can I transfer back to an H1B status from H4 whenever I find a job? -- Yes.
3. Do I need to leave the US for any of the H1B transfers? -- If you are not maintaining your status when the new change of status or transfer is filed, you will have to leave the US.

Thanks,
Aarav

See above.

[infoforme]

Follow Up Questions

Thanks kabkaba!!

Quick follow up question - if I file for a change of status from H1-B to H4 visa while I am still employed with my current employer, then can I do it while being in the US?

Thanks,
Aarav

[kabkaba]

Yes, using form I-539.