If you are the owner of an interest in a timeshare, a bankruptcy will usually have little or no effect on your timeshare interest when you file bankruptcy in San Diego. You will need an experienced lawyer to guide you through the legal process, so that you can keep your timeshares in bankruptcy.
A timeshare interest typically is created by entering into a contract whereby you acquire a contractual right to occupy certain real estate for a period of time, usually a very short time, on a periodic basic. For example, a timeshare may grant you the right to occupy a vacation home in San Diego for one week out of every year. When you file bankruptcy in San Diego, all timeshare interests that you own are classified as executory contracts and are treated similar to treatment of a car lease in bankruptcy. The significance of classifying a timeshare as an executory contract is that, with the help of a bankruptcy lawyer, you will either assume it (keep) or reject it (give it up).
When you file under Chapter 7, the court appointed trustee overseeing your case has 60 days to decide whether to assume or reject your interests in executory contracts such as timeshares. In almost all cases, the San Diego County trustees will reject your timeshare interest because it is overly burdensome or of little to no value to the trustee or your creditors.
Once the Chapter 7 trustee rejects the timeshare interest, or if the trustee fails to assume, or to reject, the timeshare, within 60 days (which is typically the case in San Diego county cases), the time share will be deemed rejected and you can assume (keep) your timeshare, provided that you have discussed your intentions with your lawyer and your lawyer has filed the appropriate documents with the Court stating your intention to assume your timeshare.
The way this happens in practice is that within 60 days of your bankruptcy filing you will sign an Assumption of the timeshare, and your Assumption will be fully valid once the trustee rejects any interests in the timeshares.
If you file under Chapter 13, the court appointed trustee overseeing your case has until the Chapter 13 plan confirmation hearing to either assume or reject your timeshares interest. In almost all cases, the San Diego trustees will reject a timeshare interest because it is burdensome and of little or no value to the administration of your case and Chapter 13 plan.
Once the trustee rejects your timeshare, you will have the option to assume or reject the timeshare. In practice, your attorney will propose a Chapter 13 plan that assumes or rejects your interests in any timeshares, and your choice will be confirmed because the trustee will reject any interests in timeshares. Confirmation of such a proposed plan results in assumption of your timeshare with the Court’s blessing.
Theoretically, if the value of your interest in a timeshare is more than what you are allowed to keep when you file bankruptcy, the Chapter 7 or Chapter 13 trustee could decide to exercise control over your timeshare and possibly sell it to generate funds to pay some of your creditors.
However, as a practical matter, in most cases a timeshare won't have such a high value and in any event it will be too burdensome to the trustee to assume a timeshare in bankruptcy. The result is that, for most people, when filing bankruptcy timeshares generally are an asset that you get to keep, provided that you want to keep it. With the help of an experienced lawyer handling your matter, one who has experience dealing with timeshares, you can keep your timeshare in either a Chapter 7 or Chapter 13 case.
If you have a timeshare and are concerned about how your timeshare will be treated in bankruptcy, call Bankruptcy Legal Center and talk to an experienced bankruptcy attorney.