How Are Timeshares Handled in North Carolina Bankruptcy?

Submitted by Rachel R on Wed, 12/09/2015 - 9:54am

How Are Timeshares Handled in North Carolina Bankruptcy?

Is a timeshare among your debts? Bankruptcy may help

Image Source: Flickr User Tony Alter

North Carolina has a whole host of timeshare resorts, particularly along our beautiful coast. If you’ve invested in a timeshare and are now considering bankruptcy to get rid of unmanageable debt, you should know how a timeshare is handled in Chapter 7 or Chapter 13 bankruptcy. You may be able to keep it or may decide there’s a better option available.

A timeshare is different than other real property – here’s why

If you purchase a one-week a year timeshare, that same property has been sold to 51 other people as well – one buyer for each week of the year. You own only a fractional interest in the property. In addition to the agreed upon “mortgage” on the property that you pay for the privilege of using it one week a year, you also must pay maintenance fees for condo upkeep that can be very costly.

Can you keep your timeshare in bankruptcy?

Depending on the type of bankruptcy you’re filing – Chapter 7 vs. Chapter 13 – you may be able to keep your timeshare. If your timeshare is newer, you may have more debt owing on it than equity (which is likely), so it will have no value as an asset. That means it can be shielded in many cases. If your timeshare value is low, you may be able to use part of your real estate exemption to protect your vacation property. However, if you want to keep it, you should make sure you can service the debt once your bankruptcy is complete.

Can you sell your timeshare before bankruptcy?

You may want to try and sell a timeshare you can’t afford before filing bankruptcy. However, it can be difficult to sell a timeshare – the market for timeshare resales is not robust and if you can sell, you may not come out of the deal with any cash in your pocket. Unlike most other real estate, timeshares do not appreciate much, if at all. And if you do make any money from the timeshare, it may be taken by the Trustee to cover some of your debt. On the plus side, you would be out from under the monthly payments and maintenance costs.

Can you ditch your timeshare in bankruptcy?

In short, yes. If your timeshare installment payments and maintenance fees are too expensive to keep up with, abandoning the timeshare may be the wisest alternative. As part of your Chapter 7 bankruptcy, you can opt to surrender your timeshare back to the company that holds the title. You must file a Statement of Intention as part of your Chapter 7 petition to end your personal liability for the secured loan and have it eliminated as part of your bankruptcy. This means you will no longer have access to the property but will also be out from under the associated financial obligations.

How can you decide what to do with your timeshare?

Before you commit to one decision or the other, consult with a reputable North Carolina bankruptcy attorney. They can take a look at your debt, income, assets and equity and discuss your goals for the future and the reasons for your financial distress. With all the details in hand on your unique financial circumstances, the attorney can suggest the wisest options for your consideration. It’s always up to you to choose the path of your bankruptcy and financial future, but an expert bankruptcy attorney can help you understand your options.

If you live anywhere in NC, contact the Law Offices of John T Orcutt for a free North Carolina bankruptcy consultation. Call +1-919-646-2654 for a free appointment at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.

Debts Hurt! Got debt? Need help? Get started below!

Serving North Carolina

  • Charlotte
  • Fayetteville
  • Durham
  • Wilson
  • Greensboro
  • South Raleigh (Garner)
  • Southport (Phone Consults)
  • Wilmington (Phone Consults)

North Raleigh

6616 Six Forks Rd Suite 203 Raleigh, NC 27615 North Carolina

Tel: (919) 847-9750

North Raleigh

Charlotte

7400 Carmel Executive Park Dr Suite 105 (In affiliation with Jack G. Lezman, PLLC) Charlotte, NC 28226 North Carolina

Tel: (704) 318-2702

Charlotte

Fayetteville

2711 Breezewood Ave. Fayetteville, NC 28303 North Carolina

Tel: (910) 323-2972

Fayetteville

Durham

1738 Hillandale Road Suite D Durham, NC 27705 North Carolina

Tel: (919) 286-1695

Durham

Wilson

2215 Nash St. NW Wilson, NC 27896 North Carolina

Tel: (252) 234-9194

Wilson

Greensboro

600 Green Valley Road Suite 210 Greensboro, NC 27408 North Carolina

Tel: (336) 542-5993

Greensboro

South Raleigh (Garner)

143 Highway 70 Garner, NC 27529 North Carolina

Tel: (919) 747-4400

South Raleigh (Garner)

Southport (Phone Consults)

4320 Southport Supply Road SE Suite 300 Southport, NC 28461 North Carolina

Tel: (910) 218-8682

Southport (Phone Consults)

Wilmington (Phone Consults)

4320 Southport Supply Road SE Suite 300 Southport, NC 28461 North Carolina

Tel: (910) 447-2987

Wilmington (Phone Consults)