What Happens To Your Timeshare if You Declare Bankruptcy

Many people regret buying a timeshare. The shared vacation properties rarely live up to their expectations, and the associated costs are insane. In fact, many owners cannot keep up with the payments, so they end up filing for bankruptcy. Read ahead to discover what happens to your timeshare if you declare bankruptcy. The results may surprise you.

What Type of Timeshare Do You Have?

To explain what happens to your timeshare if you declare bankruptcy, we must first talk about the different types of timeshares. Your situation will change depending on what type of property you own. If you have a deeded timeshare, you own an actual piece of the property. Right-to-use timeshares and points-based agreements operate more like a lease contract. It is important to remember these distinctions for the remainder of this article.

Timeshares and Bankruptcy

You can sell your timeshare if you have a deeded agreement, because you own a part of that property. Keep in mind, though, that it is easier to sell the property if you foreclose on it before it falls into bankruptcy. If you foreclose after it goes into bankruptcy, you could be liable for future payments. If you want to keep your timeshare while going through bankruptcy, you will have to agree to reaffirm the debts. This means you must be willing to take on the costs associated with the shared vacation property.

Again, right-to-use timeshares and points-based systems operate like a lease. People will not be forced to sell. Instead, they can cancel or keep their contracts after they fall into bankruptcy. The reason why these contracts are easier to get rid of is that they are worthless; they have no real value.

No one should have to deal with bankruptcy. It is a stressful situation that significantly affects someone’s mental health. Unfortunately, the process becomes even more overwhelming when timeshares are involved. Do yourself a favor and avoid this hassle altogether and cancel your timeshare immediately. Hire a timeshare cancellation services company to guide you through the process. Preferred Cancellation Services is one team that will help you every step of the way. We do not want any of our clients to fall into bankruptcy, so we are here to help.