Some West Virginia residents who are dealing with overwhelming levels of debt might also own timeshares and wonder how those will be affected if they file for bankruptcy. What might happen to a timeshare in bankruptcy will depend on whether the petitioner files for protection under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code.
Timeshares in Chapter 7 bankruptcy cases
Chapter 7 bankruptcy is known as liquidation bankruptcy because some of your assets might be sold by the trustee to satisfy a portion of your liabilities. However, West Virginia has some bankruptcy exemptions that allow you to protect some of your property. Non-exempt assets might be seized and sold by the trustee to repay a portion of what you owe to your creditors. You can use the homestead exemption to protect the equity you have in your home. However, you cannot use it to protect a timeshare, meaning that your timeshare will likely be sold by the trustee in a Chapter 7 bankruptcy case. If you no longer want to keep your timeshare, Chapter 7 bankruptcy can help you to get rid of it.
Timeshares in Chapter 13 bankruptcy cases
Chapter 13 bankruptcy offers a way for you to restructure your debts. In this type of personal bankruptcy, you will propose a repayment plan that will last for three or five years. If you successfully complete the repayment plan, your remaining unsecured debts will be discharged. Unlike Chapter 7 bankruptcy, Chapter 13 does not involve liquidation of your assets. This means that you might be able to keep your timeshare by continuing to make payments through bankruptcy court.
Owning a timeshare might offer your family a place to vacation each year. For some people, however, the payments become unmanageable, making it unfeasible for them to continue owning them. Whether or not you want to keep your timeshare, filing for bankruptcy protection might help you to enjoy a fresh financial start once you receive your discharge.