When can you still claim timeshare compensation?
Once a timeshare resort is declared bankrupt, administrators will step in to attempt to find a new buyer. If a buyer is not found, the next stage is to liquidate assets in order to pay outstanding debts. At this stage, may owners often start to wonder whether they can still claim timeshare compensation.
Where do timeshare resort’s debts come from?
Greater consumer awareness of illegal business practices within the industry, coupled with an avalanche of court cases from disillusioned consumers seeking to claim timeshare compensation have cost resorts a lot of members. Not only have many have been forced to compensate these owners, but hey have also lost a lot of revenue that would’ve been generated by their annual maintenance fees.
The travel ban at the height of the Covid pandemic also put a stop to new sales of timeshare properties, with resorts throughout Europe closing sales decks and laying off staff. This has left many resorts with unmanageable debts.
How do administrators recover money to pay off these debts?
The first step that the administrators will take is to sell all viable assets within the company. They will then begin to chase clients, in order to recover unpaid maintenance fees. In the UK, this would be done with the use of CCJs (County Court Judgments).
Who gets paid first?
As the assets begin to be sold off, priority goes to paying a resort’s creditors. This would include not only unpaid bills, but also any former members who have been awarded compensation. After that, taxes owed by the company are paid.
Will all owners be able to claim timeshare compensation?
When a company becomes bankrupt it is usually the case that its debts exceed the value of the assets. Therefore, there is unlikely not to be enough money to compensate every timeshare owner. However, if those with a pending or successful court case prior to the date bankruptcy is declared would be counted amongst the company’s creditors. The first to receive money will be those who have already been awarded compensation by the courts. Administrators are then likely to offer out-of-court settlements to those who have ongoing cases, in order to save money.
Unpaid Maintenance Fees
To ensure that all debts are paid which include compensation awarded to claimants over the mis-selling of timeshare, the next attempt to recover the funds is for the administrators to attempt to collect unpaid maintenance fees. Unfortunately, members who refuse to pay are subject to debt recovery procedures, according to the laws of their country of residence.
Will the timeshare resort close for good?
In cases where the accommodation is not sold off as real estate, it is often common for another company to purchase a bankrupt resort and assume its remaining debts. The attraction here is is to amuse possession of the remaining owner’s contracts and the lucrative maintenance fees that come with them.
Unfortunately it is a great investment for a new company that takes over the resort to continue to run it as timeshare. The new owners are under no legal obligation to repay members who had not filed cases to claim timeshare compensation from the previous company. Even though these customers have valid claims and are able to prove that they were mis-sold, the new owners are not the ones responsible for the original sale.
What should I do if my timeshare resort is declared bankrupt?
If your resort has begun to sell off accommodation as real estate, have recently filed for bankruptcy, or been declared bankrupt, it is important to act on this as quickly as possible. Gather as much information as you can, so that you know your options and can make an informed decision. However, if you are considering whether to claim timeshare compensation, it is best not to hesitate for long, lest you end up on the wrong side of the fence once the bankruptcy notice arrives.
Is information from my timeshare resort reliable?
As we have seen with several high-profile recent bankruptcies, resorts have a tendency to sugar-coat things until the last minute. Members are told that everything is under control, even as the real estate listings start popping up online.
Despite these fairly transparent attempts to discourage members from attempting to claim timeshare compensation before the bankruptcy claim is filed, many members still choose to listen to their resorts, until the inevitable happens.
At this point, these unlucky members may find themselves forced to continue paying maintenance fees, even though they may not receive the holidays that they have paid for. Worse still, these customers will never be able to recover any of the money they have spent, as the resort is either under new ownership, or gone entirely.
Can I claim timeshare compensation?
If you are concerned that your resort is struggling financially, our team of professional Claims Advisors are here to help. Please contact us either via Live Chat, or by using our contact form on the link below and a member of our team will be in touch.