Timeshares and Bankruptcy
Serving Clients in Queens, NY & Surrounding Areas
Financial hardship can arrive suddenly and without warning. You might, for example, have unexpectedly lost your job. A family member may become ill or injured, and medical expenses in the United States can be staggering. You might have invested personal funds into a business and backed loans with your own assets, and those assets are now at risk because your business is struggling to stay afloat.
No matter what events or circumstances led to your unmanageable level of debt, you have the right the achieve financial freedom, and bankruptcy might be the best way to achieve that freedom. But can you still file bankruptcy if you own several forms of property, including a timeshare?
When you file bankruptcy, you may be inclined to leave your timeshare off your petition because you don’t own the entire property outright. However, excluding a timeshare from a bankruptcy petition is a mistake—and a very common one.
At the Law Office of Seni Popat, our attorney can help you understand how bankruptcy will affect your timeshare. Many different factors will influence the outcome of your case, and we can walk you through the process and help you make the best possible decisions along the way.
Fractional Ownership Timeshares
If you own a timeshare through fractional ownership, you own the property outright but only for a certain number of weeks or months in a year. You will likely need to pay maintenance fees and property taxes. You can use the property however you like during the time you own it, but you can’t limit the rights of co-owners.
Here are a few things to know about fractional ownership timeshares and bankruptcy:
- The bankruptcy court will treat your timeshare the way it treats any other property you own.
- The trustee can place the timeshare into the bankruptcy estate, and they may sell the property to repay creditors.
- Protecting the timeshare with a bankruptcy exemption will be much more difficult than protecting your vehicle, home, or other personal possessions.
- If you used a home equity loan (i.e. second or third mortgage) to pay for your timeshare, the creditor may foreclose on your home if you’ve fallen behind on payments.
- If you want to keep the timeshare, you will need to sign a reaffirmation agreement and stay up to date on payments.
- If you do not want to keep the timeshare, Chapter 7 can discharge any maintenance fees you owe.
Our attorney can help you make the smartest possible decisions regarding which chapter to file, whether to reaffirm the timeshare debt, and other related matters.
When you lease a right-to-use timeshare, you are essentially renting the property. As such, you do not have as many property rights as you would if it were a fractional ownership timeshare. However, you may not be directly liable for the debt.
When you file bankruptcy and have a right-to-use timeshare, you have two options:
- Assume the lease. This is similar to reaffirming a debt, but it applies to leases, rather than the debt for properties you own (like a car loan or mortgage). You will either need to cure the default or convince the bankruptcy court that you will be able to cure the default in the near future. If you successfully assume the lease, the timeshare will be removed from the bankruptcy estate. In Chapter 13, the trustee may do this on your behalf so you can continue using the space while you complete your 3-5-year repayment plan.
- Reject the lease. If you reject the lease, you will no longer be liable for missed payments or maintenance fees. These debts will be discharged along with other unsecured debts at the end of the bankruptcy. As a result, of course, you will no longer have access to the timeshare property.
If you are leasing a timeshare, our attorney can help you weigh your options and determine which path is most appropriate for your situation.
Discuss Your Unusual Assets with Our Firm
Timeshares come in many different forms, and each of these has unique implications when you file bankruptcy. At the Law Office of Seni Popat, our experienced lawyer can assess all the properties you rent and own before helping you develop the best possible legal and financial plan. Bankruptcy can be a complex process, but our law firm is here to clarify these processes and guide you toward financial security as effectively and efficiently as possible.
I had the pleasure of working with Seni Popat. He is a Top Professional!- I Gie – via Google
Law Office of Seni Popat is the place to get help.- Willie Kornegay - via Google
He is very knowledgeable, professional, helpful and was readily available to guide me and advise me through the filing process.- James Potter - via Google
Seni was absolutely fantastic.- Nicole H. - via Google
Mr. Seni Popat is THE BEST bankruptcy lawyer there is.- Yasmeen Smith - via Google