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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I am retired and currently have a timeshare that I cannot afford.

Customer Question

I am retired and currently have a timeshare that I cannot afford. How do I get out of it. Should I just stop paying
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
If you are retired, and have limited assets, there may be nothing the timeshare company can do to you if you stop paying, since pension income cannot be garnished.
1) If you own a home, what is the current market value of your home, and what is the balance on the mortgage?
2) If you own a car, what is the current market value of your car, and what is the balance of the car loan?
Customer: replied 5 years ago.
I recieve a pension from the us government. I just purchased my retirement home on Oct, 25, 2011. I have no equity in the home as of yet. I own a car that is worth 5,000 and I do not owe anything on it.

I owe 16,000 on the timeshare and bought it for 18,000.
Expert:  cfortunato replied 5 years ago.

In Colorado, debtors are allowed a $60,000 exemption for their homes, and a $5,000 exemption for their cars. So unless you also have other assets with significant value, there is nothing the timeshare company can do to you if you stop paying.

Additionally, if all the money in your bank accounts is from your pension, the timeshare company cannot garnish those bank accounts. However, if there is any money in those accounts that is not from your pension, those accounts can be garnished, so it is usually a good idea to open a new account into which only your pension money is deposited.
Also, if all the money is from your pension, you should inform the bank - in person and in writing so you have proof - that they should never allow your account(s) to be garnished because all the money is from your pension, and is therefore exempt. If you don't notify the bank, they will not know all the money is from your pension (even if it is direct-deposited), and your account can be garnished.

I think this is what you wanted to know. If not, please let me know.
Thank you!

Customer: replied 5 years ago.
should i contact the timeshare company and tell them i can not pay anymore. and all of the money in my account is from my pension.

do i need to file bankruptcy to get rid of this debt.
Expert:  cfortunato replied 5 years ago.

There is no need to contact the timeshare company, especially since you can not expect they will be pleasant to you if you tell them you are no longer going to pay. The timeshare company cannot try to attach your bank account(s) unless they first go to court to get a judgment.

You do not have to file a Bankruptcy, but doing so will prevent the timeshare company from trying to collect the money from you - it will prevent them from calling, etc. You will also not have to worry about their trying to garnish your bank account(s), etc.

But even if you don't file a Bankruptcy, your home and car will be protected, since the exemptions I told you about are available to all debtors in Colorado, whether or not they file a Bankruptcy.

 

 

 

Expert:  cfortunato replied 5 years ago.

The other reason to consider filing a Bankrutpcy - at some point - is your home has no equity right now, but it will slowly build equity over time. You would certainly want to consider filing a at some point before the equity reaches $60,000 (the homestead exemption).

By the way, please don't forget to hit the "ACCEPT" button.

Thank you!