If you are considering filing for Chapter 7 bankruptcy in east Texas and you own a timeshare, you may be wondering where the timeshare will end up in the mix.
Timeshares are notoriously tough to relinquish, so it can be helpful to understand how this type of bankruptcy will affect your shared property.
How does Chapter 7 bankruptcy work?
Chapter 7 bankruptcy is a legal tool to help you get out from under debt that you have no realistic way of paying back. When you file for this kind of bankruptcy, you are selling off some of your assets to help cover and cancel your debts. Typical assets to liquidate include extras, like timeshares, boats, vehicles and the like.
Can I liquidate my timeshare?
There are two types of timeshare contracts: shared deed and shared lease. If your timeshare has a shared deed, this means that you and other owners all share the deed to the property. You can liquidate this type of timeshare in bankruptcy because you are a partial owner. If your property has a shared lease, you do not technically own any part of the timeshare. If this is the case, the property will not liquidate as an asset. However, if the lease is transferable, the bankruptcy trustee may be able to transfer it to sell. If you no longer want your timeshare, make that clear at the beginning of bankruptcy proceedings.
Timeshares and bankruptcy can be tricky, so it is important to understand how they relate to one other.