How To Walk Away (Renee) From a Paid-for Timeshare

[JLB]

Presented to stimulate discussion.

1. Start an LLC. ($104 in Missouri, with everything needed being available
online.)
2. Deed your timeshare(s) over to the LLC. (Maybe $30 in recording fee, per
timeshare.)

What are you looking for now (?), you're done.

So what if the LLC gets sued or there is a judgement against it; you gave it no assets or bank account. You are no longer personally liable.

[dougp26364]

Unless the LLC was designed strictly as a measure to defraud someone or an entitiy (such as a timeshare HOA). I'd almost bet that you could find yourself in an expensive and tight situation somewhere down the line if it could be proven that the LLC was started with the sole purpose of shifting liabilities for the purpose of defaulting on them.

[JLB]

OK, then start it for another reason.

Then, down the road a piece, deed your timeshares to it.

[T. R. Oglodyte]

Originally Posted by JLB

OK, then start it for another reason.

Then, down the road a piece, deed your timeshares to it.

Very doubtful that would stand if challenged. As I understand (and I'm not a lawyer and only play one occasionally on threads such as this) an action such as this would suffice to "pierce the liability veil" around the other entity and expose the assets of the owner(s) to the creditors.

[mshatty]

Originally Posted by dougp26364

Unless the LLC was designed strictly as a measure to defraud someone or an entitiy (such as a timeshare HOA). I'd almost bet that you could find yourself in an expensive and tight situation somewhere down the line if it could be proven that the LLC was started with the sole purpose of shifting liabilities for the purpose of defaulting on them.

Originally Posted by T. R. Oglodyte

Very doubtful that would stand if challenged. As I understand (and I'm not a lawyer and only play one occasionally on threads such as this) an action such as this would suffice to "pierce the liability veil" around the other entity and expose the assets of the owner(s) to the creditors.

A piercing liability theory called sham to perpetrate a fraud in order to make an individual personally liable for corporate/LLC debts.

[Jya-Ning]

I am at total loss here

I think I accident get to a wrong planet

Jya-Ning

[T. R. Oglodyte]

Originally Posted by mshatty

A piercing liability theory called sham to perpetrate a fraud in order to make an individual personally liable for corporate/LLC debts.

And the penalty would be more than a bar of soap in the mouth.

[JLB]

Well, I certainly would not want my veil pierced.

Asking from another angle, that of the HOA considering the expense involved in litigating against an owner (or group of owners), who (which) would you rather be facing, an (group of) individual(s), or a (group of) LLC(s)?

[Carolinian]

Most HOA's are not going to get into anything more complex than a simple foreclosure, which costs their budgets enough as it is.

Most sensible HOA's quietly take deedbacks if asked, but wisely do not publicize this. That saves the much high costs and longer time period of foreclosure and is a win-win in a bad situation for both parties.

There are more creative deeding options than this, which can really screw up a title beyond repair, but I am not going to go into the details since I don't want to encourage such things. However, my late uncle was confronted with a small, almost worthless piece of land that his political adversaries in city hall learned that he owned and started mowing it and sending him the bill, although not mowing similar property on either side. To get rid of this headache he did some real creative deeding, that has been cited in Continuing Legal Education courses, and his former law partner still gets comments on it twenty some years later.

[mshatty]

Originally Posted by JLB

Well, I certainly would not want my veil pierced.

Asking from another angle, that of the HOA considering the expense involved in litigating against an owner (or group of owners), who (which) would you rather be facing, an (group of) individual(s), or a (group of) LLC(s)?

Cost is all the same. You just put them all in one basket and sort it out.