The Short Answer
Yes, you can usually keep a timeshare when you file bankruptcy if you want to. But many people choose to give it up instead. A timeshare is treated like other property you own. If you owe money on it, you can keep paying and keep it, or you can surrender it and walk away. In many cases, bankruptcy can also wipe out the debt tied to it.
Many people who file bankruptcy own a timeshare they no longer want. Maybe the yearly fees keep going up. Maybe you do not use it anymore. Or maybe you simply cannot afford it. Whatever the reason, you are probably wondering one big question: what happens to my timeshare if I file bankruptcy?
This article explains your choices in plain English. You will learn when you can keep a timeshare, when you can give it back, and how North Carolina law affects your decision.
The Short Answer
Yes, you can usually keep a timeshare when you file bankruptcy if you want to. But many people choose to give it up instead. A timeshare is treated like other property you own. If you owe money on it, you can keep paying and keep it, or you can surrender it and walk away.
Most people who come to us do not want to keep their timeshare. The good news is that bankruptcy gives you a legal way to let it go. In many cases, you can also wipe out the debt tied to it.
How Bankruptcy Treats a Timeshare
When you file bankruptcy, the court looks at everything you own. This includes your house, your car, your bank accounts, and yes, your timeshare.
A timeshare is property. How it is handled depends on two main things:
- Do you owe money on it?
- Is there any value (equity) in it?
Most timeshares have little or no resale value. In fact, many are worth less than what people owe on them. This actually makes the bankruptcy process simpler in many cases.
If You Want to Keep Your Timeshare
You can keep a timeshare in bankruptcy. But you usually have to keep paying for it.
If you still owe money to a timeshare lender, you may need to sign a new agreement to keep paying that debt. This is called reaffirming the debt. You would also keep paying the yearly maintenance fees and any dues.
Ask yourself if keeping it is really worth it. Many people decide it is not.
If You Want to Give It Back
Most of our clients want to get rid of their timeshare. Bankruptcy lets you do this by surrendering it.
When you surrender a timeshare, you give up your rights to it. You stop using it, and you stop paying for it. In many cases, the debt tied to the timeshare can be wiped out in your bankruptcy.
This can be a huge relief. Those yearly fees never seem to end, and they often go up over time.
Will I Owe Money After I Surrender a Timeshare?
This is one of the most common questions we hear. The answer depends on the type of debt.
A timeshare can come with two kinds of money problems:
- The loan to buy the timeshare. This is a debt you can often discharge (wipe out) in bankruptcy.
- Ongoing maintenance fees and dues. These can also usually be discharged for any amount owed up to the date you file.
Here is an important point. Once you file bankruptcy and surrender the timeshare, you should not keep getting billed for it. The automatic stay stops collection efforts the moment you file. If a company keeps calling or billing you anyway, that may break federal law.
Courts have made clear that creditors who ignore the automatic stay can face real penalties. In one North Carolina case, a creditor who kept calling after getting bankruptcy notice was ordered to pay $5,000 in punitive damages. So the law has real teeth.
North Carolina Bankruptcy Exemptions and Your Timeshare
North Carolina has rules called exemptions. Exemptions protect certain property so you can keep it when you file bankruptcy.
Here is something important about North Carolina. We are an "opt-out" state. That means North Carolina filers must use state exemptions, not the federal ones. These rules come from N.C. Gen. Stat. § 1C-1601.
So where does a timeshare fit?
A timeshare is usually not your main home. Because of that, it does not qualify for the North Carolina homestead exemption, which protects equity in the home where you actually live. The homestead exemption protects up to $35,000 of equity in your primary residence (or up to $60,000 if you are 65 or older and meet certain rules).
Most timeshares have little or no equity. So in many cases, there is nothing for the court to take, and surrendering it is simple. A bankruptcy attorney can review the details of your situation and explain how the exemptions apply to you.
Chapter 7 vs. Chapter 13 and Your Timeshare
How your timeshare is handled can depend on which type of bankruptcy you file. Here is a simple comparison.
| Issue | Chapter 7 | Chapter 13 |
|---|---|---|
| Keeping the timeshare | Keep paying the lender and fees to keep it | Include payments in your repayment plan |
| Surrendering the timeshare | Give it back and often discharge the debt | Give it back through your plan and discharge what is allowed |
| Timeline | Often done in a few months | Spread over a 3 to 5 year plan |
| Best for | People who want a fresh start fast | People catching up on a home or car |
You can learn more about each option on our pages for Chapter 7 bankruptcy and Chapter 13 bankruptcy. If you are not sure which fits your life, our guide on Chapter 7 vs. Chapter 13 can help.
One note for Chapter 13. If you own non-exempt property worth more than $10,000 and want to sell it during your case, courts have ruled you need court approval first. This is rarely an issue with timeshares, since most are worth very little. But it is one more reason to work with an attorney.
What Should You Do Next?
If you have a timeshare you no longer want, you have options. Here are some calm, useful steps.
- Gather your paperwork. Find your timeshare contract, your loan papers, and your most recent fee statements.
- Write down what you owe. Include the loan balance and any past-due fees.
- Decide what you want. Ask yourself honestly if you still use and value the timeshare.
- Talk to a bankruptcy attorney. A short conversation can answer many of your questions.
Not sure if bankruptcy is even right for you? Our page on whether you need bankruptcy is a good place to start. You can also read common questions on our bankruptcy FAQ page.
Talk to Duncan Law About Your Timeshare
If you are dealing with an unwanted timeshare in North Carolina, you do not have to figure it out alone. Duncan Law can help you understand your options and decide whether Chapter 7 or Chapter 13 bankruptcy makes sense for your situation.
You can book a free consultation online, or call the office closest to you:
- Greensboro: (336) 856-1234
- Charlotte: (704) 563-1224
- Winston-Salem: (336) 245-4294
- Asheville: (828) 348-5252
- High Point: (336) 294-5800
- Salisbury: (704) 297-4000
Duncan Law proudly serves clients throughout North Carolina. To learn more about our team, visit our Why Duncan Law page or contact us today.
Frequently Asked Questions
Yes, in many cases. You usually have to keep paying the lender and the yearly fees. But many people choose to surrender the timeshare instead.
Often, yes. The loan used to buy the timeshare and any past-due fees can usually be discharged in bankruptcy. The result depends on your specific situation.
Surrendering means you give up your rights to the timeshare. You stop using it and stop paying for it. In many cases, the debt can be wiped out.
Fees owed up to the date you file can usually be discharged. You should not keep getting billed after you surrender it. If a company keeps billing you, that may break the law.
The homestead exemption protects your main home, not a timeshare. But most timeshares have little or no equity, so there is often nothing for the court to take.
It depends on the contract. Some timeshares are deeded like real estate, and others are more like a membership. An attorney can review your contract to see which type you have.
This is rare, but it can happen. If there is real equity, your attorney will explain how exemptions and the bankruptcy estate affect it. A review of your details is important.
Yes. You can choose to keep some property and give up other property. Many people keep their home and car while surrendering an unwanted timeshare.
Once you file, the automatic stay stops collection calls. Creditors who ignore it can face penalties. Tell your attorney right away if calls continue.
The cost depends on your case and which chapter you file. During a free consultation, we can explain the fees and what to expect. There is no pressure to decide right away.
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Key Takeaways
- You can keep a timeshare in bankruptcy, but you must keep paying for it.
- Most people choose to surrender their timeshare and walk away from it.
- Bankruptcy can often wipe out timeshare loans and past due fees you owe.
- North Carolina homestead exemption protects your home, not your timeshare.
- Most timeshares have little or no equity, so surrendering them is simple.
Attorney Insight
In my experience, almost no one who calls us actually wants to keep their timeshare. They feel trapped by rising fees, and the biggest relief I see is when they learn bankruptcy gives them a legal way to let it go.
