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Create a LLC Business to Get Rid of Timeshare?

Spartacus7777

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Hi - I talked to a timeshare lawyer and he mentioned that you can set up a LLC business, transfer the timeshare to the LLC, then wait a year and stop paying all the MF and be done with the timeshare. Does anyone know if this is legit or will work? I guess the LLC protects the owner since it is a limit liability corporation. The research I performed yield that this is what a lot of the "get rid of your timeshare" business are doing. Transferring 20-30 timeshares into a LLC and then stopping all payments. Any advice would be appreciated.
 

slum808

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Possible yes, morally correct no. Would you ask your Nabors to pay your mortgage because you no longer want to?
 

siesta

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Have you first tried to give your timeshare away for free? You can list it in the tug bargain basement.
 

BocaBum99

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Hi - I talked to a timeshare lawyer and he mentioned that you can set up a LLC business, transfer the timeshare to the LLC, then wait a year and stop paying all the MF and be done with the timeshare. Does anyone know if this is legit or will work? I guess the LLC protects the owner since it is a limit liability corporation. The research I performed yield that this is what a lot of the "get rid of your timeshare" business are doing. Transferring 20-30 timeshares into a LLC and then stopping all payments. Any advice would be appreciated.

Nope. If the timeshare company can prove that this was your intent in the first place, then they can pierce the corporate veil and go after you personally.

You would have to prove that you had good intentions for doing what you did in court. If all you can come up with "I don't know why I did it." Then, you will lose.

Now, if you transferred the timeshare into an LLC to start a business, you prove that you made a good faith effort to make a profit, but failed. Then you will be okay since it is fine to try a business and fail at it. You just can't create a sham company with the intent to defraud. In this case the timeshare company.
 

fishingguy

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yikes!

Some states have been aggressive at trying to prevent this exact sort of act from happening. Over the past couple of years they have enacted laws to so they can more readily criminally prosecute -- along the lines of deliberate fraud.

Missouri is the latest state that I am aware of that has done this. Of course the burden of proof will be on them....

Now having said that, one has to wonder what kind of lawyer would deliberately recommend committing outright criminal fraud? Tread carefully!
 

Maple_Leaf

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Maybe you should think about a new lawyer

Hi - I talked to a timeshare lawyer and he mentioned that you can set up a LLC business, transfer the timeshare to the LLC, then wait a year and stop paying all the MF and be done with the timeshare. Does anyone know if this is legit or will work? I guess the LLC protects the owner since it is a limit liability corporation. The research I performed yield that this is what a lot of the "get rid of your timeshare" business are doing. Transferring 20-30 timeshares into a LLC and then stopping all payments. Any advice would be appreciated.

Sounds like fraud to me. Probably to the judge as well.
 

ace2000

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Nope. If the timeshare company can prove that this was your intent in the first place, then they can pierce the corporate veil and go after you personally.

You would have to prove that you had good intentions for doing what you did in court. If all you can come up with "I don't know why I did it." Then, you will lose.

Now, if you transferred the timeshare into an LLC to start a business, you prove that you made a good faith effort to make a profit, but failed. Then you will be okay since it is fine to try a business and fail at it. You just can't create a sham company with the intent to defraud. In this case the timeshare company.

So, put your timeshare(s) into an LLC, then try to rent it out a few times, then fold it. :)
 

theo

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Nope...

So, put your timeshare(s) into an LLC, then try to rent it out a few times, then fold it. :)

That "strategy" would not ultimately work out well in any courtroom I can imagine. Rentals can very obviously be just as easily and equally conducted without the formation or use of a LLC. With likely no particular tax or other demonstrable benefits, I believe that you'd be very hard pressed to offer any convincing or persuasive explanation for having created a LLC just to conduct your timeshare rentals...

There is a single word to describe formation and use of a LLC solely to circumvent or attempt to evade financial responsibility or personal accountability. That word, I respectfully submit, is FRAUD.
For a competent attorney who knows and understands the timeshare world (...yes, they are out there ;) ) penetrating and destroying this type of scheme with a clear intent to defraud would be a walk in the park.
 
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ronparise

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With an LLC or other form of corporate ownership, you still own the timeshare (indirectly perhaps, but you still own it) ie you own the LLC and the LLC owns the timeshare.and you are still responsible

All you are doing is creating a framework where the POA cant get to you to require that you meet those responsibilities, personally...ie you are hiding behind the corporate veil. but you are still screwing someone when you dont pay your fair share

There are some here that find that wrong....others that dont care...and still others that would applaud your creativity and good business sense.

Do what you need to to but dont think you are doing things right, and dont think a smart lawyer working for the POA cant make your life hell
 

djs

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Don't forget that you are not going to be able to set up said LLC for free. Sure, you can prepare the filing and possibly file it on your own but in Massachusetts (for example) you will have at least $500 in filing fees. Offer to give it away and even pay associated transfer fees; you'll likely come out ahead.

ETA:

In Montana, where you live it is only $70; but is the timeshare in Montana or another state? If it is in another state would you also need to register said LLC in that state too (or instead)? If you register it in another state you are also going to have to pay a third party to act as "resident agent" which may run over $100 per year. These are questions you would have to ask an attorney and likely pay them for their time.

Now, how easy would it be to prove your actual intent? All one has to do is run a Google search on "setting up llc for timeshare" and the first non-paid link brings you here.
 
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ace2000

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There is a single word to describe formation and use of a LLC solely to circumvent or attempt to evade financial responsibility or personal accountability. That word, I respectfully submit, is FRAUD.
For a competent attorney who knows and understands the timeshare world (...yes, they are out there ;) ) penetrating and destroying this type of scheme with a clear intent to defraud would be a walk in the park.

Fraud has to be proven. And it takes resources and time to make that case. Are you saying that a resort is going to go after this? Personally, I'm very doubtful.
 

AwayWeGo

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D.A. Goes After Fraud. Timeshare Goes After Money.

Fraud has to be proven. And it takes resources and time to make that case. Are you saying that a resort is going to go after this? Personally, I'm very doubtful.
Fraud conviction gets jail time, plus criminal record.

Unloading timeshare lawfully only costs money.

( Just saying. )

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
 

ace2000

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Fraud conviction gets jail time, plus criminal record.

Unloading timeshare lawfully only costs money.

( Just saying. )


-- Alan Cole, McLean (Fairfax County), Virginia, USA.

Seriously, you're saying that a DA is going to go after this? LOL - then you know more about the legal system than I do.

What I'm saying is that if someone tries to rent out the timeshare as a business and later folds because the entity was unprofitable, it will be very difficult (if not impossible) to prove fraud. And a DA and/or the resort is not going to pursue that path.
 

theo

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Decisions and choices...

Fraud has to be proven. And it takes resources and time to make that case. Are you saying that a resort is going to go after this? Personally, I'm very doubtful.

I am well and long familiar with the process and all of the details of proving a case...

You are of course free to make your own decisions and choices. I will say as my (final) word on this matter that I am personally and directly familiar with several different resorts which have competent, aggressive, semi-retired attorneys (...with considerable free time) as elected BOD members. I will further speculate that you wouldn't have even a prayer of a chance if you actually chose to "go to bat" against them... ;)
 
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ace2000

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This is definitely a legal matter. If anyone is considering going down this LLC path, then please consult with an attorney and get the real truth. Don't rely on a public forum such as this as the final word.
 

timeos2

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This is definitely a legal matter. If anyone is considering going down this LLC path, then please consult with an attorney and get the real truth. Don't rely on a public forum such as this as the final word.

And even using a third party LLC operation - in the case where you pay them $3000 +/- to "get rid of" your timeshare - can come back on YOU if the LLC is proved to be fraudulently established. You'd be out the money and still be legally liable for all fees, penalties, etc.

Best not to be involved with any such scheme. Far better to give away or use far less money to buy a real owner for your timeshare and be sure it is removed from your name. Using any type of LLC - your own or someone elses - is likely to be a costly risk and will leave you wondering if it will come back & bite you rather than being safely finished with the ownership / obligation.

And as noted if you really must deal with such a plan you'd better pay for competent legal advice in addition to all the other expenses involved.
 

bnoble

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please consult with an attorney and get the real truth
Recognizing of course that some attorneys are more capable than others.

Doing something like this is clearly a bit of a gamble, and it seems to me that there are less risky ways to divest yourself of such assets. I would not attempt this alternative until I'd exhausted the others.
 

BocaBum99

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Recognizing of course that some attorneys are more capable than others.

Doing something like this is clearly a bit of a gamble, and it seems to me that there are less risky ways to divest yourself of such assets. I would not attempt this alternative until I'd exhausted the others.

Rather than take the risk of jail and/or other legal expenses for defending a lawsuit, why not just pay a PCC to get rid of your timeshare?
 

DeniseM

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Hi - I talked to a timeshare lawyer and he mentioned that you can set up a LLC business, transfer the timeshare to the LLC, then wait a year and stop paying all the MF and be done with the timeshare.

What is a "timeshare lawyer?" Was this a cold call offering to help you "get rid of your timeshare." Did your verify their credentials? If they contacted you, it's very likely that this was just another upfront fee company making cold calls. I don't know any attorneys who do that.
 
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ace2000

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Rather than take the risk of jail and/or other legal expenses for defending a lawsuit, why not just pay a PCC to get rid of your timeshare?

Why not just pay an attorney a consulting fee and check into it? The cost to set up a LLC in my state is less than $200. You do not need an attorney to do that part.

I'm not stating that anyone should do anything illegal. Just check into your options. Bringing up jail time and legal expenses are just scare tactics brought forward on this thread by non-attorneys. If you're qualified to offer this type of advice then please let us know. Or even if you could provide an example that would be helpful.
 

ampaholic

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I agree with Denise - even a second year law student would know better then to recommend a course of action that involved such obvious fraud.

But, you would be amazed what lawyers will say until they have to put their name on it, ask your "timeshare lawyer to "write it up" if it's so dang cool.

:cool:
 
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ace2000

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Recognizing of course that some attorneys are more capable than others.

Doing something like this is clearly a bit of a gamble, and it seems to me that there are less risky ways to divest yourself of such assets. I would not attempt this alternative until I'd exhausted the others.

LOL - it's a gamble coming to this board seeking legal advice, especially from other timeshare owners looking to protect their own selfish interests.

Ever try to dispose of a blue-week timeshare on the open market?
 

timeos2

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LOL - it's a gamble coming to this board seeking legal advice, especially from other timeshare owners looking to protect their own selfish interests.

Ever try to dispose of a blue-week timeshare on the open market?

Do you have verified examples of a successful "transfer" of any timeshare ownership to an LLC that then was abandoned? What proof is there that any such transfer wouldn't later be found to be invalid? If you have such example(s) how old are they? Can you or anyone else guarantee that the week(s) are truly out of the original owners name/obligation?

I seriously doubt that any of the above exist. If not why would an lawyer recommend or any owner try to use such a risky way to "dispose" of any timeshare?

As for PCC's it remains far better to use whatever excessive fee they would charge - usually $3K or more - to do a private transfer to a willing taker (use the $3K to pre-pay annual fees, closing costs, etc) - and KNOW you are really off the hook for any future expenses. Paying that type of money for a "solution" that is questionable at best and likely a scam at worst is just wasting more money IMO. If I want out I want to know I'm really free and not that I might get hit 2-3 years from now for far more than I owe today. Use your own judgement but these plans or PCC's are far too risky & uncertain for my comfort. YMMV.
 

ace2000

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Do you have verified examples of a successful "transfer" of any timeshare ownership to an LLC that then was abandoned? What proof is there that any such transfer wouldn't later be found to be invalid? If you have such example(s) how old are they? Can you or anyone else guarantee that the week(s) are truly out of the original owners name/obligation?

I don't have to provide any examples. I'm not the one dishing out legal advice to the OP. I'm the one saying that the OP should consult with an attorney.
 

AwayWeGo

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I'm Not Going To Try It -- I Know, Let's Get Mikey To Try It. Yeah !

I don't have to provide any examples. I'm not the one dishing out legal advice to the OP. I'm the one saying that the OP should consult with an attorney.
This topic comes up on TUG-BBS now & then, with some people advocating LLCs & trusts, etc., as no-fuss ways to shuck off unwanted timeshares while others caution against such maneuvers, at the same time reminding us that sticking the resort with a cast-off week really means sticking all the other owners with a share of the costs that go unpaid as a result.

What has not happened yet, far as I know, is for somebody on TUG-BBS, preferably somebody who advocates trust-LLC shuck-off, to try it & report back the results, good or bad or mixed.

Wouldn't that be something ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
 
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