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Timeshare in bankruptcy chapter 13

Carlsbad, CA |

I don't know what to do about our timeshare. It's already paid for, but the dues increase each year. We have not paid our dues, which are currently about $1,000. How do we treat the timeshare in our filing if we are not paying the dues? The management company threatened to sue and foreclose.

Attorney Answers 3


List the timeshare as real estate on schedule A and list the management fees as a secured creditor on schedule D. In the statement of intention, list that you wish to surrender this asset.

Hope this perspective helps!

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You are asking how to "treat" the timeshare, but you have not indicated whether or not you want to keep it. A time share is not real estate that you own. You don't own the real estate. You have rights to use one of multiple pieces of real estate based on your timeshare agreement.

In your bankruptcy petition, you should certainly list the timeshare as an executory contract that you have. You must also state your intention, if you plan on rejecting or maintaining this contract.

The timeshare is property (as it really is an interest in a right to use property), but there is no block and lot number or mailing address that has your name on it as a deed. So, the timeshare is personal property to get listed in your bankruptcy petition. Although the timeshare might be worth a lot to you, chances are that if you look on eBay, it has a fair market value of $1. If so, this is the value that you should put -- the fair market value -- for your interest in this timeshare.

In addition, you must include the outstanding dues you owe for this timeshare. You state that it is $1,000. Depending on your disposable income, etc., you might be required to pay back this entire amount. This would be taken into account with your overall chapter 13 payment plan.

I hope that helps.

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I disagree with both of my colleagues in part. In some states, the timeshare is real estate. You have an ownership of the property, but your right to use it is limited. In other states, the timeshare is nothing more than a right to use contract. Timeshares can be like both in states where it is real estate.

Either way, you must list the timeshare. A colleague of mine bought one on eBay for $1 (it was in Hawaii). They do not sell for much. The maintenance fee is likely a lien on the property (check the contract and loan information for that). There is probably no equity in it, so it will not affect the liquidation test.

Around here, the Chapter 13 trustees will not agree to plans that keep timeshares because the cost of the timeshare is seen as a luxury. You can opt to surrender it and pay nothing further on the obligation. The timeshare company, maintenance company, and anyone else looking for money on it should be notified.

For specifics, talk to a local attorney. I can only give general information and I am licensed in Virginia.

[I am a Virginia-licensed attorney. This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.] I hope this helps. If you think this post was helpful, please check the thumbs up (helpful) tab below. Thank you!

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1 comment

Michael J. Ireland

Michael J. Ireland


I second Mr. Goldstein's comments.

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