Do you have a timeshare or perhaps more than one? If you are like many people, you do not use it and can no longer afford the mortgage payments and the yearly maintenance fees associated with it. Filing for bankruptcy could be your solution.
If you do not have significant debt (a minimum of $10,000 or more) filing for bankruptcy to get rid of your timeshare may not be the solution for you. However, if you have mounting debt that you are unable to pay, you can wipe out your debt, give back your timeshare and stop the bleeding.
What about the maintenance fees? Annual maintenance fees and other dues such as homeowners’ association fees that are incurred prior to filing bankruptcy will be wiped out upon the discharge in your bankruptcy. However, fees and dues incurred after the filing a bankruptcy will likely not be discharged. There is a window of time between after a debtor files for bankruptcy and the lender of the timeshare forecloses on the property. During this time the debtor remains the legal owner of timeshare until the lender forecloses on the property and transfers the title out the debtors’ name. In the meantime the maintenance fees continue to accrue.
So what is the solution? In some cases the timeshare company will take back the timeshare and forgive the post petition maintenance fees. However, the debtor needs to obtain a Settlement Agreement with the timeshare company and outline the terms of the agreement to insure the post petition fees are forgiven. In other cases, the timeshare company requires a settlement amount along with the Settlement Agreement. An alternative is, if the debtor can wait to file bankruptcy, it might be a good idea to file after the timeshare company foreclosures on the property, that way the debtor can avoid paying for ongoing maintenance fees.
Either way, it is important to consult with an experienced attorney who can guide you on which approach to take. Please call Douglas, Leonard & Garvey to assist you at 1-800-240-1988 or fill out our online contact form.