Many of debtors who contact us for a free consult have a timeshare condominium. They want to know what will happen to this asset upon filing bankruptcy. Many debtors just want to get rid of the timeshare because all too often the timeshare is more a liability than an asset. This can be seen in the open market, where timeshares are being sold on ebay or other sites for $1. However, with the $1 purchase price attached is monthly maintenance and annual fees in the thousands.
Even experts say that timeshares are a poor investment and even in better times, most sellers never saw a return on their investment. "Very few timeshares increase in value," says Alisa Stephens, executive producer at RedWeek.com. As values sink and desperation grows, the number of owners giving their timeshares away for $1 - or less -- has doubled in the past year, says Brian Rogers, of Timeshare Users Group, an owner advocacy group. "There's never been a worst time to try to sell a timeshare," he says.
Undoubtedly millions of Americans own timeshares. Putting aside the value of the asset there are usually three things that a debtor will want to do with the timeshare: get rid of it, keep it or transfer ownership to a family member or friend. The simple answer is that you can always get rid of the timeshare in bankruptcy. Keeping it or transferring ownership may be possible if there is an available exemption or the trustee is willing to work out a deal.
Perhaps you just want to use the unit for "the week" of the current year. The trustee may be open to rentng the unit back to you, a family member or friend, if the unit cannot be sold before "the week" for the current year is going to occur. Of course the Trustee would need to authorize the managing agent to rent the unit to anyone of those parties mentioned. The trustee can then use those to either offset the maintenance or annual fees in with future hopes of selling the timeshare with minimal debt.
The Trustee will have many options for selling the timeshare in the open market such as: listing them on the Internet, the NABT Website, ads in the paper, auctions, etc. The Trustee may make inquiry to the debtor of someone (a friend or family member) who would be interested in purchasing the unit. Many of times, because the timeshare is of little or no value, the Trustee will simply abandon their interest in the asset. When this happens the asset simply returns to your possession, at which point you could transfer ownership.
Where the debtor owns the timeshare free and clear the Trustee may propose that the debtor keep this asset by purchasing it back from the estate. The Trustee could reasonably sell the unit back to the debtors for no money down, no closing costs and workout a note with the debtor i.e. payments of approximately $75.00 per month on a 7-year note. Then the trustee could sell the note to an investor thus bringing money back into the estate for the benefit of the creditors and allowing the debtor to keep their timeshare. Bankruptcy with the right attorney can provide workouts for timeshares and other assets that the debtor might bring into the bankruptcy estate.
The New Jersey personal bankruptcy attorneys at Riviere Cresci & Singer LLC can answer any questions you may have concerning your timeshare and bankruptcy. If you live in New Jersey, including Asbury Park, Belmar, Howell and Long Branch call us for a free consultation to find out how we can help you.