Bankruptcy question: RE: keeping my DVC

[sweetp267]

I am considering filing for bankruptcy if my employment situation does not improve. I am not going in to specifics here, but I do have a specific question about my DVC. I have had my DVC at the BW for about 10 years and if I do go through with filing, what happens to my DVC? I do not make any payments other than the maintenance fees every month. I know that I can put it up for sale, but since there have been many restrictions put on new resale buyers now and my ownership ends in 31 years how would I go about selling it? I know I just can't give it back and get a refund and there are a ton of contracts up for sale on the broker's website that I bought from. If I list it and no one makes an offer then what do I do? Do I try to sell it to these companies that send you a mailer telling you that you can sell to them and not have any more maintenance fess next month? What do they pay? Ten to twenty cents on the dollar? What about ROFR? If someone offers to buy and Disney exercises ROFR then will Disney pay and I still get my money?

I know that is a lot of questions to answer, but I know that selling a timeshare is not like selling a piece of furniture but I don't have a clue.

One more thing, would the judge allow me to keep my DVC or is that one of the first things they tell you to liquidate?

Thanks for the help.

 

[tinkmom2]

I am not sure exactly what to do with your timeshare except go through a reputable broker. With bankruptcy you would be allowed to keep a house or car but would most likely have to sell your timeshare or things like a vacation home or trailer.
Also I would research bankruptcy lawyers. They will answer any questions you have about what you can keep. The bankruptcy will stay on your record for up to 12 years so it's something to do as a last resort. There are two kinds chapter 7 and 11. One is restructuring which is like bill consolidation and the other is the more serious of the two giving you a clean slate.

 

[momof1princess]

former legal secretary here....there are two types of personal bankruptcy - chapter 7 and chapter 13. chapter 7 is a straight bankruptcy, which basically wipes out your debt and allows you to start over, and a chapter 13 is a debt consolidation, which will allow you to repay a set percentage of your debt; the rest is written off. not sure where a timeshare fits into that, but, if you're serious about filing, i would consult an attorney before i did anything-many attorneys do free consultations, and it would put your mind at ease and give you an idea where you stand. good luck!

 

[mrsklamc]

I recommend removing your post and then calling an attorney. I see flames on the horizon.

 

[NYCDiane]

Can't the timeshare be included in the bankruptcy since it's a debt? When you go to your attorney for your consultation, ask him/her about it.

Good luck. There are a lot of people filing bankruptcy these days. Times are hard for many.

 

[beansmom]

i second the recommendation for consultation with an attorney. But..if all you are paying is maintenance fees, then the original debit is paid off and I'm not sure that would be required to be listed. And, frankly, I know of people who filed and wanted to keep a certain credit card...they simply did not list that in the list of creditors. Not saying right or wrong..because I am not an attorney...just saying what they did.

You should contact an attorney asap.

 

[mrsklamc]

I think she'd have to list it, not as a debt but as an asset.

 

[islandmum]

try putting the DVC up for sale - use the proceeds to pay off some debts and you may not have to go into bankruptcy at all.

surely the best outcome?

 

[cel_disney]

Recommend that this post move to the DVC boards and that you do some searches there...there are many waysto handle this.

In the meantime - I recommend that you list your points for rent with Daddio (www.dvcbyrequest.com) - that will cover your maintanance fees and then some for your yearly points - you would get 10$/point in the rental.

 

[punkin]

I think she'd have to list it, not as a debt but as an asset.

I am not sure that's exactly true. It's hard for me to see a timeshare as an asset. I always thought it was a liability (or an obligation, if you will). Since it's DVC and Disney has been known to ROFR, I suppose it does have some value.

 

[seashoreCM]

Your having to pay the maintenance fee could be a sore point for the bankruptcy attorney and your creditors who might want that money instead.

Not sure about Disney Vacation Club but for some timeshares the maintenance fee is a personal obligation even if you give the timeshare itself away. Bankruptcy eliminates that personal obligation when the timeshare is listed as a liquidatable asset.

 

[erinmomof2]

I worked for a bankruptcy firm for years, and my job specifically was to work with the Trustees of a bankruptcy case and look for and or sell assets that were not listed, listed incorrectly, or were not allowed. The pp was right in that there are 2 types of bankruptcy. However, to file Chapter 13 you must have a steady income because you will be put on a payment plan that is based on that income. You also have to be able to pay all your living expenses like mortgage, food, utilities, and than the left over money is used to pay your creditors through the bankruptcy trustee.

If you do not have a steady income or enough to pay your day to day needs than you must file Chapter 7. In a Chapter 7 you would almost positivly not be able to keep DVC. Being that it is paid off the Trustee would see that and immediately contact someone to inspect and list it for sale. In Chapter 7 you are only allowed to excempt so many assets that you can keep. Like you can excempt a car (but only 1 car) and you can excempt your home... although if you have more than the allowed amount of equity in your home the bankruptcy trustee can and will list that for sale as well. And he can do it legally. They will allow a settlement with them sometimes, but you would need to come up with the money for that. Extra things like timeshares are the first thing to go.

I'm not trying to scare you. But as I said it was my job for years to go through people's assets to see what they were hiding, or what they were incorrectly listing. I have listed numerous timeshares, houses, cars, jewelry, furs, you name it for sale or auction. Many times the individual filing had no idea that it was a possibility they could lose these items because their lawyers did not tell them. I would consult with an attorney and check into your state's bankruptcy laws. There are specific laws that deal with how many assets you can have. I know in MI it is very clear cut about how much equity you can have in your home, and what is and is not allowed to be excempt during a bankruptcy.

Hope this helps a little. And good luck!

 

[Acklander]

From what I understand, the courts don't consider a timeshare as an asset. If you want to keeo it You can list it with a value of zero. If you would prefer to sell it, so you don't have to make the maintenance payments anymore, then start the process to sell.

ETA. Obviously, the person who posted before me has more experience than me, so it would definitely depend on the state where you live. Where I'm at, they didn't consider timeshare to be an asset.

 

[rock_doctor]

If all you are paying is maintenance fees i would try to find a way to keep it. Can you sell it to a family member or parent for a dollar and just transfer the deed? It is costing you less then a grand a year, keep it and rent out the points. It should be able to support it self... Just make sure if you sell it to a parent that they put it into their will to go back to you again... I truly wish you the best of luck, i fear we may all, at some point, be in your situation... Post this again in the DVC Miscellaneous forum. We see posts like yours a couple times a month.

 

[Marionnette]

If all you are paying is maintenance fees i would try to find a way to keep it. Can you sell it to a family member or parent for a dollar and just transfer the deed? It is costing you less then a grand a year, keep it and rent out the points. It should be able to support it self... Just make sure if you sell it to a parent that they put it into their will to go back to you again... I truly wish you the best of luck, i fear we may all, at some point, be in your situation... Post this again in the DVC Miscellaneous forum. We see posts like yours a couple times a month.

Couple of questions with regard to this proposal.

1. Wouldn't Disney definitely exercise ROFR on a sale of $1?
2. And wouldn't a bankrupcy court see right thru this action as an attempt to hide assets?

I could only find one online answer that was specific to both DVC and BK that was not from a post on the disboards. And I'm not even sure how old it is and if BK laws have changed since it was written.
http://www.vacationtimesharerentals...ey-vacation-club-if-you-claim-bankruptcy.html

FWIW, if your DVC has value and selling it would help you to pay off some of your debts. Trying to hold onto it while sticking it to your creditors is just morally wrong even if you can find some sort of legal way to do it.

 

[ccgirl]

From what I understand, the courts don't consider a timeshare as an asset. If you want to keeo it You can list it with a value of zero. If you would prefer to sell it, so you don't have to make the maintenance payments anymore, then start the process to sell.

ETA. Obviously, the person who posted before me has more experience than me, so it would definitely depend on the state where you live. Where I'm at, they didn't consider timeshare to be an asset.

The OP doesn't get to decide how much things are worth. It is fair market value.

OP - sell all you can to pay down your creditors and stay out of bankruptcy. Good luck.

 

[*pixie*dust*]

It is doubtful a BK trustee is going to allow you to keep a timeshare as it is viewed as a luxury item. It would likely have to be sold for whatever you could get for it and that money would go towards other creditors.

 

[tlbwriter]

From what I understand, the courts don't consider a timeshare as an asset. If you want to keeo it You can list it with a value of zero. If you would prefer to sell it, so you don't have to make the maintenance payments anymore, then start the process to sell.

Just out of curiosity, why wouldn't it be considered an asset? True, it includes a financial obligation, and it may be worth less than the OP paid for it, but wouldn't the same be true of a condo, for example, that includes owner's association fees?

 

[IDoDis]

I thought bankruptcy rules were tighter now where a filer's income had to be under a certain amount to file, but the rules vary by state. We sued an attorney for legal malpractice and won a hefty amount in court following a week-long jury trial (almost 1/2 million dollars), but the attorney then turned around and filed bankruptcy to avoid paying. She was able to keep her $350k home, all of her vehicles, a large camper/travel trailer, etc... She's taken trips to Hawaii since the bankruptcy.

I didn't think this kind of stuff was allowed anymore, but apparently it is.

 

[Boardwalk Gal]

I had a friend who claim bankrupty (ch 7) due to spouse unemployment and she owned the DVC Key West...It was paid off way before the bankrupty and all she had to do is pay yearly maint. fees.

She kept the DVC since it not a debt and did not had to report it.