This article briefly explains how a person can deal with two situations simultaneously – Timeshare Contract and Bankruptcy. When timeshare properties are not worth too much, owners feel happy getting rid of them during bankruptcy. However, some timeshares are valuable, so owners like to keep owning them even after a bankruptcy.
The owner’s capability of owning the Timeshare usually depends on the “Bankruptcy Chapter” for which they have filed, their equity in the Timeshare, and the laws of the state where they signed the contract. By contrast, if the owner wants to exit their monthly payments, they can surrender their timeshare ownership and give it back to the original lender. But they will remain responsible for the Timeshare’s maintenance payments until the bank forbids and transfers the ownership title out of their name.
What Happens to a Timeshare during Bankruptcy?
A timeshare is an asset and is subject to bankruptcy rules. Depending on ownership rights, the bankruptcy court will decide how to handle the Timeshare. For example, a timeshare owner with deeded fractional ownership may be forced to sell the asset. A bankruptcy and timeshare cancellation company, such as Wesley Financial Group BBB, can also explain the different types of timeshares and how they affect your rights.
File for Chapter 13 Bankruptcy
If you file for Chapter 13 bankruptcy, your Timeshare will be included in the repayment plan. However, you’ll be required to pay back the Timeshare with modified loan terms. Sometimes, timeshares will be surrendered in return for a bankruptcy discharge. However, if you filed for Chapter 7, the bankruptcy trustee will not be able to sell your Timeshare. So, if you have equity in Timeshare, sell it yourself. Then, you can use the funds to make your repayment plan.
Reaffirmation of Debts
Reaffirmation of debts is another option for dealing with timeshares. Reaffirmation means continuing to be liable for the debt after bankruptcy. If you default on the debt, you may lose the Timeshare and face a deficiency. You should consider this option carefully. If you are unsure about your rights, consult with an attorney. If you are unsure about the bankruptcy rules, consult a bankruptcy attorney.
Sell the Ownership
A timeshare that has been deeded is considered fractional ownership. Typically, this means you have a deeded interest in the vacation unit. You can sell your timeshare if you have a deeded interest in it. However, you may have to pay back the fees associated with the Timeshare. Reaffirmation will also protect your Timeshare from foreclosure.
Owner’s Ability to own the Timeshare
Depending on the type of bankruptcy and the value of the Timeshare, you can keep your Timeshare if you can continue making payments on it. If you do not have enough equity to keep your Timeshare, you may be able to buy some equity through a wildcard exemption. If you cannot sell your Timeshare, you can choose to surrender it to avoid the bankruptcy trustee from selling it to repay your creditors.
Are You Filing for a Bankruptcy during Timeshare Ownership Worth it?
When a timeshare owner starts to throw around the term – Bankruptcy, it is obvious they have gotten it in their head. Unfortunately, it is not something that is commonly talked about in the timeshare industry till the time foreclosure threats are involved. Based on the conversation above, financial privation is rarely the reasoning. Instead, the feeling of mistrust and entrapment stimulates their desperation to exit the timeshare constraints.
Wrapping Up
To help people determine how to hold a timeshare when registering for bankruptcy, consider meeting with an expert and knowledgeable bankruptcy and timeshare cancellation company, such as Wesley Financial Group BBB.
