DVC and Bankruptcy

[Tigger1]

How about you buying a small contract threw a resale. Then have them transfer the points for your trip to you.

This might not be possible though if they would need to cancel the reservation and then transfer the points.

Either way I would talk to them and see what thee lawyer says is going to happen to the reservation.

 

[Dean]

How about you buying a small contract threw a resale. Then have them transfer the points for your trip to you.

This might not be possible though if they would need to cancel the reservation and then transfer the points.

Either way I would talk to them and see what thee lawyer says is going to happen to the reservation.

This is unlikely to work as by the time one buys and is ready for the transfer, it's unlikely they'll be a "member in good standing" and would be prevented from doing transfers. Plus the reservation would be canceled upon the transfer. Likely better would be to find a current member who would be willing to work with them and receive the transfer then make the reservation if still available. That increases the chance that the points CAN be transferred and the possibility of getting a reservation.

 

[DisneyFreaks]

I have a question sort of related to this. Neighbors of ours have filed chapter 13 bankruptcy. They are doing a 100% payback of their debt. They are DVC owners and say they are being able to keep their contract. However DVC apparently contacted them and told them all is fine but the trip they had booked for august would have to be cancelled for the time being. I don't understand why. I don't think they do either but are just happy to be keeping their DVC so are not asking questions. Anyone understand why a trip would have to be cancelled even though they are still paying their loan? I guess I'm just curious as to how these things work.

 

[Dean]

I have a question sort of related to this. Neighbors of ours have filed chapter 13 bankruptcy. They are doing a 100% payback of their debt. They are DVC owners and say they are being able to keep their contract. However DVC apparently contacted them and told them all is fine but the trip they had booked for august would have to be cancelled for the time being. I don't understand why. I don't think they do either but are just happy to be keeping their DVC so are not asking questions. Anyone understand why a trip would have to be cancelled even though they are still paying their loan? I guess I'm just curious as to how these things work.

I'm not a bankruptcy expert but that doesn't make sense to me. I wonder if they are behind currently on their payments or fees.

 

[DisneyFreaks]

I'm not a bankruptcy expert but that doesn't make sense to me. I wonder if they are behind currently on their payments or fees.

Didn't make sense to me either. She did say that they told her the automatic payments would stop until they received their discharge from the courts. But couldn't they just keep making payments themselves by check or money order?

 

[lilpooh108]

Just to quickly add on to what others have said, the bk debtor's bank accounts become the bk trustee's assets once bankruptcy is filed. they legally don't own their bank accounts and can't pay you back. if they did, the trustee may void the payment for fraudulent conveyance.

Technically, any payments they made to any third parties 90 days prior to filing bk come under scrutiny. In other words, you really don't want them to pay you back right now unless you want to be involved in the bankruptcy. You would file an unsecured creditor's proof of claim in BK court and perhaps get some of it back when the bankruptcy is discharged (usually no money is left).

Under federal statutes, you're not technically even supposed to make demands for bk debtor's money...just FYI, don't email him any requests for cash, etc.

 

[Mommee]

Didn't make sense to me either. She did say that they told her the automatic payments would stop until they received their discharge from the courts. But couldn't they just keep making payments themselves by check or money order?

Just to quickly add on to what others have said, the bk debtor's bank accounts become the bk trustee's assets once bankruptcy is filed. they legally don't own their bank accounts and can't pay you back. if they did, the trustee may void the payment for fraudulent conveyance.

Technically, any payments they made to any third parties 90 days prior to filing bk come under scrutiny. In other words, you really don't want them to pay you back right now unless you want to be involved in the bankruptcy. You would file an unsecured creditor's proof of claim in BK court and perhaps get some of it back when the bankruptcy is discharged (usually no money is left).

Under federal statutes, you're not technically even supposed to make demands for bk debtor's money...just FYI, don't email him any requests for cash, etc.

Just guessing, but between these two I'd say that no payments can be made to DVC until the bankruptcy is done, so the membership is sort of on hold until the people can start making payments again.

 

[popgfd]

bankruptcy isn't necessarily a fast process. planning bankruptcy and then actually filing can be a significant difference in time and the type of filing can be complete dissolution or debt re-organization.

But if they filed balls-up and are walking away from everything, then your deposit is gone unfortunately. if they are trying to cut debt like credit cards then you may luck out.

there is also something about points already in use like your reservations being treated as gone and not included in the assets. i'm a bit unclear but i think its treated like you trying to sell a contract with a reservation in play. so the contract can be sold but the points aren't included in the deal. i'd check with a DVC legal type.

Pop

 

[JennisSilly]

Didn't make sense to me either. She did say that they told her the automatic payments would stop until they received their discharge from the courts. But couldn't they just keep making payments themselves by check or money order?

Speaking from experience.. No, you can't. DVC will REFUSE any payment made to them during the period between when a bankruptcy (at least chapter 7) is filed, and discharged. However, if you are re-affirming your contract and it is not liquidated as an asset by your trustee, they will then require "back payment". Basically, you have to pay all your months of missed dues/payments.

 

[DisneyFreaks]

Speaking from experience.. No, you can't. DVC will REFUSE any payment made to them during the period between when a bankruptcy (at least chapter 7) is filed, and discharged. However, if you are re-affirming your contract and it is not liquidated as an asset by your trustee, they will then require "back payment". Basically, you have to pay all your months of missed dues/payments.

That does make alot of sense. Thanks for explaining it to me.

 

[LouisianaDisneyFan]

Can you be added to their DVC membership as a principal (I think that's the term, but we are newbies) until the time when your reservations come up? Then you could make the remaining arrangements and payments for your upcoming trip, but it would not affect their bankruptcy. You would not be an owner of the asset, so you wouldn't be drug in to their proceedings... and Disney would not refuse your payments because there would be no court order concerning payments from your account.

I think the best way to approach this is to explain your concerns to your friends and ask if you can meet with them and their bankruptcy attorney to explore the options. Chances are, they do not want the court or the attorney to know they are planning a Disney trip while in bankruptcy, so they might balk at this request. If they do balk at talking with the attorney, even given your concerns, then I think your friends would understand and accept your desire to cancel the reservations and get your deposit back... BEFORE the accounts are frozen. Just get the refund in cash rather than in check form.

 

[pickles]

I like the idea they transfer the points to another DVC member..maybe one of the rental guys could do it?

then the points should be safe and you can go ahead with your plans..paying a small fee to the dvc member who helps out

 

[Dean]

I like the idea they transfer the points to another DVC member..maybe one of the rental guys could do it?

then the points should be safe and you can go ahead with your plans..paying a small fee to the dvc member who helps out

Someone who actively rents likely won't do it for a small fee because they'll use up their one transfer for that year.