Is DVC financing still possible with a Chapter 7

[HappyGrumpy]

Just curious if anyone has had personal experience with this?

Down payment in hand, don't know if it will help, I appreciate anyone willing to share.

 

[disneynutz]

I suppose that anything is possible but consider that DVC ownership is a luxury that is very expensive for a contracted period up to 50 years. Many don't realize that buying the contract is actually the least expensive part of your adventure. Travel, food, tickets, and extras increase in price every year and your total cost of vacations can easily run $150,000 plus.

Good luck and let us know what you find out.

Bill

 

[tjkraz]

DVC's preferred financing rate is 10.75%. For those with credit issues it's typically 14.75%. If nothing else, they will probably sock you with the higher rate and may even request more than the typical 10% down.

DVC got burned a few years back by buyers who gave a small downpayment, used as many points as possible, and then defaulted on the purchase. As a result, they have gotten more conservative in their approvals. If the buyer represents a greater risk, they want to make sure they get enough up front to cover their own administrative and legal expenses if they have to foreclose after a relatively short period.

 

[slowly]

Looking at a standpoint of qualifying for any loan, it comes down to 3 major components:

1. Character
2. Capacity- Ability to pay
3. Credit- History of payments. It comes down to how long you filed BK7. The general unwritten rule is about 5 yrs from filing that a company would "consider" a BK7 applicant.

It is a loan and considering how long you filed. In terms of the finance company, why would they consider your application if you recently filed? The best way to re-establish credit after a BK filing are credit cards for lower amounts. Although a timeshare is considered property ownership it's technically an unsecured loan. Which makes it difficult to qualify based on your signature since it will be a substantial amount.

 

[HappyGrumpy]

Thank you all for the info and perspectives. May need to sit on this a few more months before jumping on trying or maybe until they announce a small addition of DVC at the Poly

Thanks Heaps!

 

[bumbershoot]

Well, in the meantime, just keep saving. Maybe before you decide, you'll have enough for a small contract *somewhere*, purchased for cash through resale!

Also, the nice thing is, the DVC financing people don't "ding" your credit like another lender would, so, at least in our experience, it's not going to hurt you MORE to ask them officially. (we didn't have a bankruptcy, but hubby's credit was "neutral", with negativity in the long-ago past)

 

[stmize]

We were able to. We did have to finance at the higher rate but we plan on paying off early. Our chp 7 was also about 8-9 yrs ago and we had to show proof that we were current on out mortgage

 

[YourEveryDayAdam]

Here's my little story:

Due to an unexpected medical bill, I was forced to file a chapter 7 in October of 2007. There were a few complications in my BK case and my discharge ended up getting delayed until December of 2009. My case was then closed and completed in January of 2010.

Having the debt burden lifted, I was now able to start saving up some money. In February of 2010 (about 18 months after filing my chapter 7) I was able to qualify for the higher interest rate on a DVC loan with a 10% down payment.

 

[webcs]

This is my personal viewpoint so users and mods please dont kill me, ok.

I feel very strongly that if one needs a loan to get a DVC they really may want to consider not doing it. This is probably the worst investment %% point wise that one can do with a loan.

My advise is to open a savings account and start saving for this before you buy in. Do not worry there is no rush. The resale market will be there when you are ready and prices historically have always gone down.

I wish you well and hope you are able to someday but really think you should think about this very hard.

 

[webcs]

Here's my little story:

Due to an unexpected medical bill, I was forced to file a chapter 7 in October of 2007. There were a few complications in my BK case and my discharge ended up getting delayed until December of 2009. My case was then closed and completed in January of 2010.

Having the debt burden lifted, I was now able to start saving up some money. In February of 2010 (about 18 months after filing my chapter 7) I was able to qualify for the higher interest rate on a DVC loan with a 10% down payment.

Wouldnt it make more sense to wait a little longer and get that better loan and get that larger downpayment? Your putting yourself in the worst possible position.

Also is there any urgent reason for a DVC purchase? Many members rent out points all the time and can help you.

 

[webcs]

Well, in the meantime, just keep saving. Maybe before you decide, you'll have enough for a small contract *somewhere*, purchased for cash through resale!

Also, the nice thing is, the DVC financing people don't "ding" your credit like another lender would, so, at least in our experience, it's not going to hurt you MORE to ask them officially. (we didn't have a bankruptcy, but hubby's credit was "neutral", with negativity in the long-ago past)

Good point, you can add on later.

 

[Sandisw]

This is my personal viewpoint so users and mods please dont kill me, ok.

I feel very strongly that if one needs a loan to get a DVC they really may want to consider not doing it. This is probably the worst investment %% point wise that one can do with a loan.

My advise is to open a savings account and start saving for this before you buy in. Do not worry there is no rush. The resale market will be there when you are ready and prices historically have always gone down.

I wish you well and hope you are able to someday but really think you should think about this very hard.

I also think that it really is a personal decision in terms of waiting or financing DVC and the financial aspect is not necessarily the motivating factor for everyone.

IMO, the best advice to give any prospective DVC owner is to make sure they understand everything about DVC and that they evaluate it all before making a decision. If financing is needed, then it certainly changes things but as long as the person goes in with eyes wide open, then they have done what they should before making any large purchase.

We were a family who decided that taking yearly vacations to WDW outweighed the financial drawbacks of financing. We had a yearly vacation budget and we decided that as long as we could buy DVC and stay within that yearly budget--what we had been spending as cash guests--then it made sense for us.

We didn't end up financing because of the Disney Visa but had we, we would have been perfectly okay with it.

 

[YourEveryDayAdam]

Wouldnt it make more sense to wait a little longer and get that better loan and get that larger downpayment? Your putting yourself in the worst possible position.

Also is there any urgent reason for a DVC purchase? Many members rent out points all the time and can help you.

Nope. It made a lot of sense to buy DVC at the time. Looking back on it (years later) I can honestly say that it was still a very good decision.

Everyone says, buy the resort you want to stay at... well for me, that was BLT. I bought BLT back when the points were still $112 - $14 off per point...I got BLT for $98 per point. Plus I also got a year's worth of "developer's points" that I could use at SSR for free. At a "rented cost" of $10 per point, that drops the net price down to $88 per point.

If I had waited a little longer, let's say a three years to today, for my credit to get better and to save up a bigger down payment, i'd be paying $150 - $10 off per point, for $140 total, per point. Even buying resale now, they are at $103 + closing costs. Buying resale at the time I bought the points wasn't an option either because the resort wasn't even open yet... there was no resale market for BLT yet.

If I were to sell today, I could sell the points for $103 per point, and make $5 per point more than I paid...and I still already went on 8 vacations. If I take all the money that i've paid in interest on the loans, it's still less money than I would have spent if I had gone on only half as many trips to Disney World.

Finally, given that you don't know all of the facts about my particular circumstances, I don't know how you can judge that i'm putting myself in to the worst possible situation. As I said, I was forced to file Chapter 7 because of a large unexpected medical bill...Yes I had/have insurance, but the bills were still very high. Otherwise, I was very sound financially...good paying job, and no other debt except for a house and auto loan.

As far as the "urgent reason" for buying DVC, there was no urgency behind it. I was planning on buying DVC for several months before my BK case was finished. I just wasn't able to because I was in the middle of a BK and you aren't allowed to take on new debt while you have a pending case. I had already decided I was going to buy, simply because it made more financial sense to buy DVC if you're going to do many Disney vacations... it saves a lot of money over time. During my BK case, I saved up money for a 25% down payment quite easily.

 

[Capo]

This is obviously a very personal decision, often with many emotions attached. However, emotions are usually very strongly tied to money. That's why some people get into debt and that's why others use their entire lives in pursuit of it.

If I attempt to dissociate my own emotions from this question, a few particular questions come to mind around the purchase:

1) Do you have debt today (not counting house, unless excessive to your income)? Credit Cards, Student Loans, Car payments, etc.?
2) How much are you saving towards retirement? How much is saved already?
3) Do you have an emergency fund of at least 6 months expenses in LIQUID assets?
4) Do you have dependents? If so, are their needs covered? Do you have enough money saved for college or at least on a monthly savings plan to get you there?

If you can't answer favorably to all of the above and you still want to proceed with the purchase, I would caution that your "emotions" about your desire to buy into DVC are putting you/your family at risk. As was said, DVC is so, so much more of a cost than merely the buy-in amount.

Personally, I would highly encourage anyone to ensure that the above 4 points are in proper order before ever considering such a large purchase as DVC. Take care of your families NEEDS first (everyone of the above directly impacts that) before you address your wants.

Good luck!

 

[midsouthnurse]

I'm not sure if this will help, but there is a way to avoid getting hit with the higher interest rate for financing. If you attempt financing through DVC and are rejected, (they are looking for credit scores of 700 and higher) then you can buy into DVC by purchasing 50 points, cash. (Around $5100 after processing fees.) They will break it into 2 monthly payments, if you need. Once you are a member, then they will not run your credit again for future contracts. (Per a DVC employee in Member Services.) You will get the Preferred Rate for financed contracts. Just sharing some info on the "backdoor" route. This is how we bought into SSR and then purchased a larger contract without getting hit with a higher interest rate due to a slightly lower credit score at the time. Good Luck!

 

[Eventer98]

To get back to the OP's actual question...I was 7 yrs out of my bankruptcy when we bought but I believe my credit score had reached over 700 again. I was approved at the lower rate with 10% down. We have since added on and not had any issues getting the lower rate again.

 

[happenin2you]

We just became members on Thursday. We are 2 years 3 months outside of chapter 7, bought a house in June, which was at exactly our required 2 years from BK date, and then bought a new car 1 week after closing on the house. It can be done.