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Current info on walking away from a timeshare
I searched the forums and read a few posts about this but most of them end with "don't do it, it will wreck your credit" and then the posts go off topic on to other things.
We purchased a biennial 2 weeks floating/240,000 points at Welk Villas in Escondido, CA and have made 2 years worth of payments on it. At the time, we could afford it, just barely and probably shouldn't have gotten sucked into signing but in the end it was us that signed it.
With layoffs and the current economy, my credit is already shot, not much better than if I had declared bankruptcy.
By my estimation, my TS is worth MAYBE $6K on the open market and we still owe $13.8K on it. I could rent it to offset the yearly maintenance fee but that doesn't solve the problem of the month finance payment.
What is the worst case scenario if we stopped paying our TS mortgage payment and maintenance fees? At some point wouldn't the collection agency give up and the Resort take it back (even if it took 6 months or a year of them hounding us)? With an auto-loan, if you stop paying, the repo man comes and takes the car away. Why wouldn't the TS eventually take the deed back?
Is there any other legal action they can take for non-payment other than destroying your credit rating?
Can I Quit Claim deed it back to them even if it's not paid off? then they would technically own it, but I would still be on the hook for the financed money?
I am really at a loss.
Matthew S.
You've got a double whammy as far as your timeshare goes .... a mortgage AND maintenance fees .... I'm sorry to have to tell you that if you walk away from these obligations your credit rating will be negatively affected ... since you don't own the timeshare (you have a mortgage) you're obligated to the company that holds the mortgage AND you're obligated to the resort to pay the maintenance fee .... the vast majority of resorts do not take deeds back even if your mortgage was paid off. The best advice I can give you is to use, rent or exchange your timeshare until the mortgage is paid off then try to sell it.
R P.
One more thing, you say your credit is already shot then I would consider just stop making the mortgage payments and maintenance fees and let it go into foreclosure ... if your credit is already shot, it couldn't get much worse ... also you might consider filing for bankruptcy.
R P.
Hi Matthews121, If you are behind on your credit payments such that your credit is almost as bad as a bankruptcy, and you can't pay for your timeshare, you should declare bankruptcy. If you don't pay your debts, the IRS at some point will tax you on the unpaid debts and possibly interest as income. You should consult a bankruptcy attorney if your total debt is substantial. If you declare bankruptcy, the unpaid debts will not count as income, and the IRS will not come after you for taxes on the debt. Stan.
stanleyf5
Last edited by stanleyf5 on Nov 26, 2009 09:26 AM
One other thought that I have seen work is call your resort. I have seen and heard cases where the owner just tells the resort the problem and lets them know that you are asking for their help in this case. Also at this point there is no other option left to your family!
State clearly that you are on the way to possible bankruptcy and this is your last try at getting this timeshare and cost you can no longer pay off your back.
When they understand how this is your last call to them and you will be filing they might just decide to take it. If not and you really are hurting maybe you should follow through as you say your credit already shot!
Remember the resort couldn't careless about your problems but bottom line is they won't get any more money out of you and the cost to foreclose is high with same result of getting the unit back which you are offering them free.
If it is a decent resort then they will out last this down turn and resale this unit again.
Good luck! PHILL12
Phil L.
Last edited by phill12 on Nov 26, 2009 08:24 PM
phill12 wrote:One other thought that I have seen work is call your resort. I have seen and heard cases where the owner just tells the resort the problem and lets them know that you are asking for their help in this case. Also at this point there is no other option left to your family!State clearly that you are on the way to possible bankruptcy and this is your last try at getting this timeshare and cost you can no longer pay off your back.
When they understand how this is your last call to them and you will be filing they might just decide to take it. If not and you really are hurting maybe you should follow through as you say your credit already shot!
Remember the resort couldn't careless about your problems but bottom line is they won't get any more money out of you and the cost to foreclose is high with same result of getting the unit back which you are offering them free.
If it is a decent resort then they will out last this down turn and resale this unit again.
Good luck! PHILL12
The problem with this scenario is that the resort may not hold the mortgage on his timeshare .... it's could be another entity altogether, however if the resort does hold the mortgage it's worth a try as Lawrence Welk is a very popular resort, but I wouldn't hold my breath for this to happen.
R P.
Thanks everyone for your replies. The information is helpful. Yes, indeed, my mortgage is held separately through a third party company, Chicago Title. No doubt Welk does it that way so they are not tied directly to the leveraged properties?
Looks like no matter what I'll end up paying $3K or $4K to get out of this. If I abandon it and then it gets foreclosed, I'll owe the IRS at some point.
My reluctance to declare bankruptcy is that the rest of my creditors for other debts have all (even if unwillingly) agreed to negotiate with me and settle reduced payoffs. The only one that doesn't want to seem to compromise is the TS.
The negative credit responses for all these should only stay on my credit for 7 years whereas the bankruptcy will stay 10.
Does anyone know if a TS foreclosure would stay on your report longer than any other negative hit?
Matthew S.
This moment in time a bankruptcy isn't as bad as it was few years ago because so many people have filed. With so many families going into foreclosure its just not as big a hit any longer.Its nice that some payments can be reduced to help you but bottom line how long will you be going through this before being out of debt. At some point seven to ten years not that bad.
I'm not for bankruptcy but at some point it might be the way to go. Remember you care but the companies you owe don't give a darn about you or your problems,they just want their money!
PHILL12
Phil L.
Last edited by phill12 on Nov 28, 2009 01:08 PM
matthews121 wrote:Can I Quit Claim deed it back to them even if it's not paid off? then they would technically own it....
No --- and your stated conclusion about the resort then "technically owning it" is NOT correct. Under NO circumstances can anyone just quit claim a deed over to an unwilling "grantee" (recipient) without the full knowledge AND consent of the grantee. Any such attempted "one way" quit claim action on your part would simply result in a completely invalid deed.
KC
Last edited by ken1193 on Nov 28, 2009 06:16 AM
matthews121 wrote:Does anyone know if a TS foreclosure would stay on your report longer than any other negative hit?
As I stated above, if you simply quit paying maintenance fees and your weeks go into foreclosure, that's one thing, but you also owe the title company the balance of your timeshare loan and if you stop paying that then it will be just like you stopping your car payment, house payment etc. where a mortgage company holds the mortgage until paid off ... doesn't matter that it's a timeshare mortgage it's still a mortgage .... I feel your pain and I wish you better luck in the future .... many people are in the same predicament you are .... at least you're trying to work something out instead of sticking your head in the sand.
R P.
stanleyf5 wrote:Matthew, Don't forget that when your creditors write off part of your debt, the IRS considers that income. The IRS will be looking for taxes on the part of the bill which is written off by each creditor. Stan.
Was this a new change to bankruptcy or always been there? Reason I ask is I know three people over last ten years that filed bankruptcy and this never happen to them that I ever heard about.
PHILL12
Phil L.
hi my name is david i have a new co calling now they say for $1700 they can and wall get reed of your timeshare o it sounds to good to be true. nice pepole nice video but is it true. they tell you how bad gmac,timeshares only are and say they are not like that they say the cost to get reed of the timeshare is to paper work the transforr.the deed. closing cost they say its a deall thene they sart talking about mant fees and thay start adding up to show you how much you will kip paying this is true this co has a nice weeb site soo is this co real they say they are in brunswick ga i looked up bbb no co no info (vale professionals lls) 218-339-2409 www.llabenews.go.com help how do you get out of this timeshare i will give it away for free help
David F.
davidf450 wrote:hi my name is david i have a new co calling now they say for $1700 they can and wall get reed of your timeshare o it sounds to good to be true. nice pepole nice video but is it true. they tell you how bad gmac,timeshares only are and say they are not like that they say the cost to get reed of the timeshare is to paper work the transforr.the deed. closing cost they say its a deall thene they sart talking about mant fees and thay start adding up to show you how much you will kip paying this is true this co has a nice weeb site soo is this co real they say they are in brunswick ga i looked up bbb no co no info (vale professionals lls) 218-339-2409 www.llabenews.go.com help how do you get out of this timeshare i will give it away for free help
NO it's not true, it's a scam to get your credit card # and the fee ... that's all they want.
R P.
davidf450 wrote:help how do you get out of this timeshare i will give it away for free help
In this economy some timeshares can't even be given away ... depends on the supply and demand of the resort and the time you own ... there are hundreds of 1 cent to $1 timeshares on Ebay with no bids.
R P.
stanleyf5 wrote:I mean if he negotiates with his creditors to pay a portion of the debt and the creditors forgive the rest without him filing bankruptcy. If he files bankruptcy there will be no income tax on the forgiven debt. Stan.
Stan wouldn't that mean that all home owners who had the home loans re-worked and changed to todays value fall under this rule too? I'm talking about the upside down loans where the owners owe more than todays worth!
PHILL12
Phil L.
Last edited by phill12 on Nov 29, 2009 05:23 PM
stanleyf5 wrote:I mean if he negotiates with his creditors to pay a portion of the debt and the creditors forgive the rest without him filing bankruptcy. If he files bankruptcy there will be no income tax on the forgiven debt. Stan.
From what I gather he has negotiated with his other creditors and they have worked out a plan .... the only one not willing to work with him is the timeshare resort and the lender (Chicago Title):
mathews121 stated "My reluctance to declare bankruptcy is that the rest of my creditors for other debts have all (even if unwillingly) agreed to negotiate with me and settle reduced payoffs. The only one that doesn't want to seem to compromise is the TS."
R P.
