You are misinformed about unemployment statistics when you state that 93% of the population is gainfully employed. Unemployment rates demonstrate the "current" percentage of the population that are unemployed and actively seeking employment during the past 4 weeks. People who have given up or taken part-time or lesser positions are no longer included in the statistic but are far from gainfully employed. The actual unemployment number is much, much higher than what is reported.
I wouldn't say I was misinformed so much as I simply misspoke. I understand that only certain groups are counted in the statistics. However, doesn't it stand to reason that someone would be actively seeking employment if they had payments due on a Disney timeshare?
Just because people are forced to take part-time or lesser positions does not mean they are headed for default on their debts. I have a relative who works in an automotive-related field who has been in-and-out of work (mostly out) for the last 6 months. But they continue to make payments on their debts.
Dues collection are based upon the points in circulation but require payment. Should the original DVC member go into default and file for bankruptcy, those dues will not be paid. However, the underlying bills to DVC must be paid therefore resulting in higher dues the following year. Yes the majority of people continue to meet their obligations but insolvency is reaching an all time high and will continue to escalate at unheard of rates for the forseeable future.
If and when DVC obtains defaulted points, they will not obsorb the missing dues, rather it will and has been passed on to current members through their dues.
Well, the dues statements do include a disclaimer stating that the figures cited within represent the full annual obligation for each member. So technically DVC does not have the power to back-bill members for others' unpaid debts.
From a practical standpoint, they may be able to find...ahem...creative ways to defer expenses or reserve contributions and increase the amounts charged to members in subsequent years. I don't know how rigidly DVC's books are scrutinized to comment on that.
DVC can also respond to lower revenue by reducing resort overhead.
Still, I don't see justification for some of the more inflammatory comments here. According to one report I read, 2008 bankruptcy filings were around 1.2 million, up 30% from 2007. And another increase of 15-20% was projected for 2009. Those certainly aren't signs of a healthy economy--but they also don't give me reason to believe that my dues will be rising 15% next year to compensate for members who defaulted on their loans.
DVC has been dealing with defaults and delinquencies for 18 years now. While a 50% increase over a two year period is not a best case scenario, I'm not convinced that the sky is falling, either.
You seem to have a great deal of knowledge on this topic but I'm left scratching my head over comments like "a large number of defaults" and "sizeable [dues] increases." I'd love to hear more but specifics (even if speculative) would be appreciated.
I did a search of the Orange County Comptroller's website and was able to find 261 judgments to foreclose on DVC in 2008. That's a tiny percentage of the 140k owners in the program and I don't see most of us being impacted by a 20% increase in 2009.
Same thing with my Mom...she is also out of work and her unemployment ran out some time ago as well. We have both fallen thru the crack and are no longer even counted in the unemployment numbers. I also look for PT work or "lesser jobs" but there aren't even many of those to look for. Of course I look online at all of the regular job boards...but I also look thru my little local up-county Gazette paper every week. 7 or 8 months ago even it still used to have a whole Classified Section. NOW, that entire section is gone!! The Help Wanted ads that used to be several pages now fit onto 1 page and it's mostly stuff like "Telephone - Work At Home" or "Drivers Needed" stuff. It is sad. ANYWAY, as long as the Ramen Noodle plant doesn't turn up as having the next salmonela outbreak I think we'll make it. It is another reason I'm glad we didn't finance thru Disney as I would feel obligated to sell our DVC if we had that high interest rate hanging over us.
