Will I Lose My Timeshare if I File for Bankruptcy?

timeshare

Photo courtesy of Krystal Vacations

Many Americans are able to enjoy fairly lavish getaways through a partial ownership of a vacation property known as a timeshare. Timeshares are essentially vacation homes that are owned by a number of people who share usage of vacation time at the home, condo, apartment or townhouse. Also shared are the maintenance responsibilities in the form of monthly or yearly payments. Investing in a timeshare makes what may otherwise be an unaffordable getaway attainable for average households around the world.

As you are not the sole owner when you invest in a time share home, you may be wondering what will happen to your percentage of the timeshare if you file for bankruptcy. This is actually a pretty common concern and question among bankruptcy clients, because of the fact that a timeshare simply isn’t a straightforward property ownership situation.

In our experience, clients who are already deep into debt often just want to be relieved of the timeshare responsibilities and upkeep payments. If this is the case for you, unloading a timeshare is possible but be prepared to lose money. According to financial experts – a timeshare is a poor investment even in the best financial market.  They simply don’t increase in value. In fact, many desperate timeshare owners just want to be out from under the yearly maintenance fees, which can easily add up to thousands of dollars.

You can sell your timeshare on the open market on sites like eBay if your goal is to be rid of the maintenance fees at a time when your finances are already unmanageable. More specific websites focus solely on timeshare sales, making it quite simple to unload your vacation time – if that’s what you’re aiming for.

Keeping a timeshare through a bankruptcy is a little tricky, but it can be done if you follow some rules, and if there is an exemption available for timeshares in your bankruptcy filing. You may find the most success in transferring your timeshare over to your bankruptcy trustee, if s/he is open to the idea. This solution may permit you to still enjoy taking a week-long vacation during the year in which you are filing for bankruptcy, if you can work out an agreeable deal with the trustee. If the trustee is unable to sell the timeshare right away, it’s possible that s/he may be amenable to renting to your family for your vacation week.

The above scenario will most likely only occur during the first year after transferring ownership of your timeshare to your bankruptcy trustee, because chances are high that the trustee will want to sell it as soon as possible to avoid accumulating debt of his/her own.

If you happen to own the timeshare completely, another scenario may present itself: repurchasing the timeshare back from the estate. In order for this to work out in your favor, you’ll need the right bankruptcy attorney to ensure that the right investor purchases the Note in order to bring in enough money to satisfy creditors, and giving you the ownership of the timeshare once again. It is vitally important that you find a qualified attorney who has solid working relationships with a variety of investors, and respectable experience handling bankruptcy matters.

For more information regarding filing for bankruptcy, timeshares, and getting your financial life back in order, call our office today, or click on over to our contact form. Want a free consultation? All you have to do is “like” us on Facebook!

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One Response to Will I Lose My Timeshare if I File for Bankruptcy?

  1. Pingback: Cancelled Flight? Know Your Rights! | Veitengruber Law

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