Timeshares: A Liftetime Of Debt – Not An Investment

by Susanne Robicsek, North Carolina Bankruptcy Attorney

November 15, 2009

Bankruptcy  is often looked at by people to get away from debts they can’t pay, and timeshare obligations are often part of that mix.

Having regrets?  That timeshare may have seemed like a great idea when you bought it, but many people pay a lot of money for something they don’t use or can’t afford.   It also might not be quite the bargain that you thought it might be, not to mention that you are limited to returning to the same place year after year, or having to vacation at properties on “the list” of places you can use your points.

It is nearly impossible to sell many timeshares.

  • So what do you do if you can’t pay the timeshare payments and/or the timeshare maintenance fees?  

First, try to sell it.   Even if you lose money, getting out from under the loan payments and fees may be wise.

Try to give it back.  If you can’t find a buyer, you can ask the timeshare company if they will take back the title/deed to the timeshare and release you from your obligation.  This is called a “deed in lieu” of foreclosure.  The timeshare company is in a better position to resell the property, and may be willing to take the deed. You will get off the debt and away from the monthly obligations – although you loose any investment that you have put in.

The problem comes when they don’t want to take the property back but choose to pursue payment on the contract instead.

File bankruptcy to discharge the balance owed on the purchase.  If you can’t pay, and you can’t sell, and you can’t give it back, you might need to  speak to an experienced bankruptcy lawyer to talk about filing bankruptcy to discharge your loan.   Even if you file, you might still be responsible for taxes and ongoing dues depending on the type of timeshare you own and the terms of the contract.

While it doesn’t usually makes sense to  file for bankruptcy just for a timeshare debt, if you have other issues  you might be able to deal with this and other debts in a  Chapter 7 or  Chapter 13 bankruptcy case.  Your attorney can look at your situation and give you guidance.

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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Last modified: February 14, 2013