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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39183
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I have a timeshare with a co-owner. The co-owner filed

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Good morning,I have a timeshare with a co-owner. The co-owner filed chapter 13 bankruptcy. He states that he began making his payments in December 2016. However the timeshare mortgage company has been refusing payments due to the bankruptcy filed. Why is the timeshare mortgage company refusing payments and why are they reporting the delinquency to the credit bureau?


First, I don't know where the timeshare company is located -- but, if it's located outside of the USA, then the consumer protection and bankruptcy laws that typically protect U.S. persons don't apply to your timeshare. This may answer your question.

Assuming that the timeshare company is located in the USA, then there is a "split of authority" from different bankruptcy courts in the USA concerning whether or not the reporting of a delinquency to a credit reporting agency violates the Bankr. Code 362(a) automatic stay. Consequently, the timeshare company may simply be intent on risking a contempt citation by the bankruptcy court -- which the debtor may be unwilling to pursue due to the additional litigation costs which may be involved. Or, the timeshare company may simply be ignorant of the law -- that's something I can't evaluate -- but, if I were representing you, I would send a letter to the timeshare threatening a contempt action unless it immediately removes the negative credit reports. That's usually enough to resolve this sort of problem.

As for why the timeshare is refusing payment, it could be due to the timeshare believing that if it accepts payment it may be accepting a "preference" transfer, which it would later be required to return to the bankruptcy trustee. Co-debtors are equally covered by the automatic stay when one co-debtor has filed Chapter 13. Bankr. Code 1301(a).

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, Justanswer retains your entire payment, and I receive nothing for my efforts in your behalf.

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Customer: replied 5 months ago.
The timeshare is located in Florida. We both live in Maryland. The timeshare mortgage company refuses to speak with either one of us and states that it will only speak with the lawyer representing the co-owner. I have asked the lawyer to call the timeshare mortgage company to inquire as to why they are refusing payment. If the co-owner has started making his repayments, then they should be accepting payments as well?
Customer: replied 5 months ago.
One more thing, the co-owner stated that the timeshare was not included in the list of debts filed in the bankruptcy. Does this have an affect as well.

If the timeshare is not part of the Chapter 13 filing, then it's also not part of the bankruptcy estate, which means that there is no automatic stay. This suggests that the timeshare company doesn't know what it's doing -- and it doesn't want to pay a lawyer for legal advice.

You'll probably have to find a lawyer to write a letter to the timeshare and explain the law.

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