If you are considering bankruptcy, you may be wondering what will happen to your car or your house. In fact, these questions are so common that we have prepared a client FAQ detailing exactly what happens in the bankruptcy process to these and other essential assets.
You may also be wondering what will happen to your timeshare if you file a Chapter 7 or Chapter 13 bankruptcy. This blog will discuss the options available depending on whether you want to give up or keep your timeshare.
What is a Timeshare?
When you buy a timeshare, you are buying a share of ownership in a property with many other people. Most clients who own a timeshare financed the property with a timeshare mortgage or a loan from the developer. Since a timeshare is subject to a mortgage, it can be foreclosed upon, just like a home. Additionally, most timeshares charge monthly or annual maintenance fees for the upkeep of the property.
What Happens To My Timeshare in a Bankruptcy?
What happens to your timeshare if you file bankruptcy depends on which type of bankruptcy you file and whether you want to keep your timeshare.
Giving Up Your Timeshare in Bankruptcy
If your timeshare is worth less now than when you bought it, you may want to get rid of it. If this is the case, both Chapter 7 and Chapter 13 bankruptcy will let you surrender the timeshare, wipe out your liability for the mortgage balance, and eliminate any previously accrued maintenance fees owed before the date you file bankruptcy. For Chapter 13 filers, this would be contingent on your getting a discharge after finishing your three or five-year repayment plan.
Can I Keep My Timeshare if I File Bankruptcy?
Chapter 7 Bankruptcy
In a Chapter 7, if you have equity in the time share, whether you can keep it depends on what other assets you have. The attorneys at Levitt & Slafkes, P.C. can help you determine whether an exemption applies that would help you keep the timeshare or whether you would be able to repurchase the equity from the trustee to avoid a sale.
Chapter 13 Bankruptcy
In a Chapter 13 bankruptcy, you are allowed to keep all of your assets, including timeshares. In a Chapter 13 bankruptcy a repayment plan is developed that lasts from three to five years. This plan allows individuals to catch up on missed payments and keep their assets. When you file a Chapter 13 bankruptcy you can often keep your timeshare if you include it in your repayment plan.
In the Chapter 13 bankruptcy you must also demonstrate that you have enough income to pay the timeshare’s monthly mortgage payment and maintenance fees in addition to your required monthly repayment plan payment. If you don’t have enough income to cover everything, you need to consider either surrendering the timeshare or letting go of another expense.
To keep your timeshare in your Chapter 13 you must:
- Include the arrears that you owe on the timeshare in your Chapter 13 repayment plan.
- Stay current on timeshare payments. Throughout the Chapter 13 repayment plan you must continue to make timely payments for the timeshare; including the maintenance fee. The payments can be made through your Chapter 13 Plan or directly.
Contact Us to Learn How Bankruptcy Will Affect Your Timeshare
We have helped borrowers all over New Jersey keep their timeshares and eliminate unwanted timeshares in bankruptcy. Whether you are ready to file, or are just exploring your options, we can help. During your free consultation, the knowledgeable attorneys of Levitt & Slafkes, P.C. will carefully explain the bankruptcy process so you can make an informed decision about how to best proceed.
Contact us today at 973-323-2953 to schedule a free initial consultation.
We are proudly designated as a debt relief agency by an Act of Congress.We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only.Nothing should be taken as legal advice for any individual case or situation.