before you do ANYTHING at all with your
DVC... DEFINITELY consult with your attorney about it. Selling it right before you file can have a dramatic effect on your paperwork and what you can/can't do, or even your ability to file for BK in a timely manner.
Disclaimer: I am not a lawyer, and this is not legal advice. I suggest talking to your attorney for legal advice.
Basically, if you sell the DVC and pay them off and it's anywhere near the time you file your BK (+/- 6 months-1 year), it could be seen (by the BK trustee/court/creditors) as a preferential payment to a creditor. That is a BIG no-no. Basically, with a BK, different tiers of creditors (preferred, secured, and unsecured) get payed at different rates. Your loan through DVC falls in to the secured bucket.
With secured loans you have the option of having them ride through the BK (you keep making payments to them and those debts don't get discharged), you have the option of having them fully paid off via your BK (this pays them in full, and your BK estate must have enough to pay your secured creditors in full), or you can just include them in the BK and forget about them. There are pros and cons to each option. If you had a lot of equity in your DVC, then it might be preferential to keep it for you, since it could ride through your BK and then be an asset you would have to possibly sell after your BK is done.
If you didn't have equity, but wanted to keep your DVC, you could choose not to include it in your BK and do a re-affirmation agreement with Disney. This would make your debt obligation to DVC survive the BK and you would get to keep it. You would have to continue to make payments.
Since you have no equity, and you said you can't afford it any longer, it makes the most since to just include it in your BK and let the court/DVC handle it. Disney will just take the points back and resell them.
I think in most cases, the attorney will tell you to stop paying Disney any payments and just include the DVC with your BK. If you have no equity in the DVC mortgage, then Disney would get the points back to resell, and you don't have to come up with any more money to pay any deficiencies on the resale. It will also make your BK much less complicated.
Also, since you know DVC is going away, i'd stop making payments to DVC right now and start saving your DVC payments altogether for future necessities. There is no sense in sending good money you can use now for food, shelter, etc. after bad money that will just get sucked in to a DVC black-hole and disappear without any benefit to you.
