When it comes to bankruptcy, people often have a lot of questions, and one of them may be about timeshare properties. Although sometimes a person may want to eliminate that type of debt through bankruptcy, others may want to keep the property if at all possible. Maintaining a timeshare depends on the type of bankruptcy filed, social capital, and state law.
Keeping Timeshares in Bankruptcy
It is usually easy to escape from timeshare if a person chooses to file a Chapter 7 bankruptcy. The person filing bankruptcy usually needs to simply tell the court-appointed trustee that they do not want to keep the timeshare and that is it! The court will likely be willing to let you give up the property and use the money to pay off your debt. However, it is a little more complicated if you want to keep your property.
Chapter 7 Bankruptcy
In Chapter 7, the Board of Directors sells most of the assets and uses the proceeds to pay off the creditors. At the end of this operation, no debts are remaining for the person who filed bankruptcy. If you want to keep your timeshare, as long as the value is less or equal to what you owe for the timeshare, there will be no equity in the property. This means that selling the property will not benefit your creditors, so you can keep the property if you continue to make your payments.
Chapter 13 Bankruptcy
If you have more resources to hang on to, it may be a better option to choose chapter 13 bankruptcy. In this type of bankruptcy, it is not always mandatory to give away your larger assets. However, you will have to invest all your available income in order to pay your creditors. You will also have to prove that you can afford to pay the monthly fee and maintenance fees in addition to the repayment plan payment for your bankruptcy.
In the case of bankruptcy, the dissolution of the bankruptcy may exclude a person’s liability for a timeshare. In most states, you will be responsible for maintenance costs that occur after a bankruptcy petition and foreclosure. Bankruptcy only eliminates invoices incurred before the date of bankruptcy. This means that any expensive maintenance fees that are due after filing your bankruptcy will continue to pile up against the debtor and be non-dischargeable.
In addition, you will also remain the rightful owner of the timeshare until the lender carries out the seizure of the items on loan and transfers the title to their name.
It is advisable to declare bankruptcy after the sale in order to avoid paying the ongoing maintenance costs. However, before applying this strategy, you should talk to your accountant and an experienced bankruptcy attorney. This will protect you from incurring tax liability.
Please note that the remaining amount will not be eliminated until you have completed the three-to-five-year payment plan.
Contact an Experienced Georgia Bankruptcy Attorney Today
It is recommended that you think of the bigger picture before filing for any type of bankruptcy. If you are considering bankruptcy, contact the attorneys at Lankford & Moore Law today to schedule a consultation. We can help you understand what type of bankruptcy might be your best option and whether or not bankruptcy is right for you.