Bankruptcy and DVC

[Lawshark]

Ok so let me see if understand what you are saying. Even though my house is worth less then my first mortage lets say by $4000 and my second is lets say $ 50000 then the second mortgage can force us into foreclosure?


After DH and I talk to an attorney. It looks like DH and I are going to sell DVC 1st . The reason I was considering it was our house is under water.

Correct...if you default on your 2nd mortgage...they can foreclose on you. They take the property from you subject to your first mortgage.

You owe the money...and you pledged your property to them.

My area of practice is not bankruptcy...but I find it hard to fathom the poster indicating that a 2nd could be "stripped" in limited circumstances. Absent fraud on the part of the lender at the inception of the loan that is repugnant.

 

[lilfritzy]

I filed banruptcy back in 2003 with my ex-husband and we did not loose our vacation club. My laywer handled all that it was stated to not have any "equity" in it. I'm not sure if the laws have changed since then I would just check with your laywer.

 

[JUDYKN]

SSR,

Listen to rstackjd and contact a bk attorney before making a decision to sell DVC. There is info that has been stated here that is not correct. There is a chance to keep DVC (that has equity) through a chapter 7 bankrupty depending on your circumstances.

I hope the best for you during this difficult time

 

[jmkjr72]

it is well worth talking to a bankrucpty attorney we had to file a few years back(we did ch 13) due to medical issues and a screwed up refi to pay the dr bills at first we thought we would loose every thing but thanks the the attorney and the judge we were able to keep every thing(the judge forced the title company that screwed up the refi to take payments per the terms of the refi)

 

[dgray70]

This thread got me wondering... if a DVC timeshare is foreclosed upon and goes to public auction, what happens with ROFR? More specifically, if the trustee is paid for the auction, and ROFR is exercised, would an auction winner need to go back to the trustee to be refunded? Or would the bankruptcy court void ROFR in a bankruptcy sale?

 

[Dean]

This thread got me wondering... if a DVC timeshare is foreclosed upon and goes to public auction, what happens with ROFR? More specifically, if the trustee is paid for the auction, and ROFR is exercised, would an auction winner need to go back to the trustee to be refunded? Or would the bankruptcy court void ROFR in a bankruptcy sale?

My understanding is that the auction is effectively the ROFR. Most timeshare companies that have any interest in ownerships that are being sold, esp those that have ROFR, tend to monitor and attend the auctions and bid up to the amount they would have taken it ROFR considering all the extra hidden costs that may be included in a tax sale. Also, for sale in Lieu of foreclosure, they tend to do the same but the choice is theirs.

I work in health care as an RN. I am already seeing downsizing and I work for an HMO.

HMO's nationally are losing membership as a whole, ours hasn't (yet) but it helps when you're perenially in the top 10 nationally. Still we have seen our membership change over the last few years with Medicare Advantage. I would also suggest you talk to a Bankruptcy attorney BEFORE you sell or change anything. Definitely don't liquidate retirement accounts or similiar prior to talking to one or more. I hope things work out for you.

 

[dgray70]

My understanding is that the auction is effectively the ROFR. Most timeshare companies that have any interest in ownerships that are being sold, esp those that have ROFR, tend to monitor and attend the auctions and bid up to the amount they would have taken it ROFR considering all the extra hidden costs that may be included in a tax sale. Also, for sale in Lieu of foreclosure, they tend to do the same but the choice is theirs.

Thank you for this info.

 

[pyrxtc]

Just a quick question .... sorry if I sound judgmental but how are affording DVC if you can't afford to pay your mortgage ? Owning DVC not only comes with payments of it's own but vacation expenses also.

I would sell my DVC and use that money to pay toward my mortgages.

 

[Lawshark]

Just a quick question .... sorry if I sound judgmental but how are affording DVC if you can't afford to pay your mortgage ? Owning DVC not only comes with payments of it's own but vacation expenses also.

I would sell my DVC and use that money to pay toward my mortgages.

That is the proverbial elephant in the room...ain't it?

 

[toastedoat]

We actually just went through this, so maybe my experience will help. We signed up for DVC in 2003. I lost my job in April 2009, and we filed Chpt. 7 in September - things were bad, and the banks/creditors were threatening all kinds of stuff.

in order to keep our house, etc. we had to give up the DVC. Basically our lawyer said that the trustee isn't going to excuse a large amount of debt just so we could keep taking vacations. However, the court doesn't really know how to handle DVC, since you really don't have "equity" in the traditional sense of the term - they instead try to put a dolar value on the points you have available to you on the date you filed. Once everything was discharged in November, DVC sent us a (I think it was called this) "Release in lieu of Foreclosure" where we basically surrender the membership to Disney. If we didn't sign it in a certain period of time, they were just going to foreclose.

Luckily, I found a job right around New Years'. So we have actually been working with Disney, and by next week will be all caught up and keeping our membership. But I got lucky - this economy sucks, and the job market is worse. Good luck to you.

 

[z28wiz]

I believe what your talking about is a deed in lieu. You sign the deed back to the creditor and they dont foreclosue, usually saving everyone money.

We actually just went through this, so maybe my experience will help. We signed up for DVC in 2003. I lost my job in April 2009, and we filed Chpt. 7 in September - things were bad, and the banks/creditors were threatening all kinds of stuff.

in order to keep our house, etc. we had to give up the DVC. Basically our lawyer said that the trustee isn't going to excuse a large amount of debt just so we could keep taking vacations. However, the court doesn't really know how to handle DVC, since you really don't have "equity" in the traditional sense of the term - they instead try to put a dolar value on the points you have available to you on the date you filed. Once everything was discharged in November, DVC sent us a (I think it was called this) "Release in lieu of Foreclosure" where we basically surrender the membership to Disney. If we didn't sign it in a certain period of time, they were just going to foreclose.

Luckily, I found a job right around New Years'. So we have actually been working with Disney, and by next week will be all caught up and keeping our membership. But I got lucky - this economy sucks, and the job market is worse. Good luck to you.

 

[Dean]

Basically our lawyer said that the trustee isn't going to excuse a large amount of debt just so we could keep taking vacations.

I wondered about that issue and expected that was the case.