By now, you may be regretting the day you ever signed the contract on that troublesome timeshare. If so, you’re not alone. Many before you have discovered once the ink has dried that not only do they rarely use their allotted weeks or months, but the monetary outlay in mortgage payments and maintenance fees is adding up to far more than they’d ever expected.
Now, they want only to be rid of it, and that’s when they discover something else: No one, but no one, is willing to take it off their hands. If that’s the position in which you currently find yourself, you may think there’s one potential solution that just might do the trick. You could try filing for bankruptcy.
Now, if you are gainfully employed and your debts add up to less than $10,000, this is unlikely to work. Here are some things that are looked at for a bankruptcy:
In filing for Chapter 7 bankruptcy, you are asking the court to wipe out your debts either partially or in full. This will normally entail relinquishing some or all your nonexempt property to a bankruptcy trustee who will then sell it and use the proceeds to satisfy your creditors. In other words, the timeshare’s status as either exempt or nonexempt will determine whether you lose it or keep it. So, there’s no guarantee.
Exempt items usually include such necessary objects as your clothing, your furnishings, your appliances, your pension, your primary motor vehicle and other items deemed to be essential to your welfare. Luxury items, on the other hand, are not exempt from seizure by the bankruptcy court. This raises the question of whether timeshares are or are not thought to be luxury items.
In most cases, they are, and unless you reaffirm this portion of your debt, you will be losing yours. However, whether you get your wish hinges on whether your timeshare involvement consists of a right-to-use, a points-based or a deeded fractional interest. For example:
If your timeshare involvement is on an ownership basis, it might be advantageous to let the timeshare company foreclose on the property before you file for bankruptcy. This could turn the deficiency into an unsecured debt, thereby wiping it out, however, it will destroy your credit score preventing you from qualifying for anything else for a long time.
On the other hand, if you continue to incur those fees after filing for bankruptcy, you may be out of luck. Some courts treat post-petition fees as nondischargeable debts. If yours takes this position, you will still be forced to make those payments even after filing.
There is a much better option than filing for bankruptcy just to rid yourself of your timeshare. The attorneys at O’Grady Law may be able to help you get out of your timeshare in a reasonable amount of time and at a reasonable cost. This is all without the additional headache of a bankruptcy filing which will be another burden for years to come. We are well-versed in the intricacies of timeshare contracts, and we will be glad to answer any questions you may have. Please give us a call today.