[2015] About to Start the Foreclosure Process

[GoChiefsorBust]

Hello Everyone,

I have been lurking on this site for about 2.5 years. I discovered it about 2 months AFTER my soon to be ex husband and I purchased ownership at La Cascada (San Antonio, TX). We have 308k annual points, and we were paying a LOT for it in maintenance and loan fess.....almost $1k/month.

Originally we were splitting the timeshare payments 50/50; however due to his poor financial decisions, I have been trying to take over the entire payment on my own. However, that is no longer feasible.

I completed the Wyndham Financial Hardship package and put in receipts, copies of bank statements, W-2s, legal documents, statements from lawyers.....I submitted this information about 3 weeks ago and hadn't heard back from anyone so I called them. I was informed that my financial hardship claim was denied. I promptly told the (nice) representative that I need them to cancel any automatic withdraws, seeing that I won't have the money to pay them any way.

I asked what the penalty for non-payment would be: he told me that their creditors would call and harrass me until we went into the foreclosure process, which would adversely affect my credit score. I told him, ok, thank you for your honesty.

I have read how people would come on here and ask "what would happen if...." but they would never come back and update people on the status of WHAT happened if they DID; well, consider me your guinea pig! I appreciate the wealth of information I have received from you all, so it's the least I can do. I'll try to provide current, timely, information as soon as I have been provided with updates from them. My hope is that with me having made contact with Wyndham 4 months ago, and last month, they see a record of me making an effort to be upfront about my financial situation. I doubt they care though.....

 

[gygull]

I received my hardship package yesterday. I'm disappointed to hear that you were denied considering the fact that you are going through a divorce. I'm going to hold off filling out mine for now. At least until I decide which route to go.

 

[GoChiefsorBust]

I was too. We had made payments on time this entire time. It's not like I just chose to stop paying.....I actually enjoy using the TS and was disappointed with their findings. I'm researching a Plan B and C and D.......just in case....but as it stands my actual mortgage takes precedence.

 

[vacationhopeful]

You owe almost $50,000 on your timeshare loan?

Your soon to be ex ... he signed those loan papers also ... tell Wyndham where he works?

If you agreed to take over this in your NOT YET finalized divorice ... kick you lawyer's butt and redo the settlement agreement.

Shit happens ... BUT you can't take this hit on your credit for the next 10+ years ....

 

[Passepartout]

We are saddened by your circumstances. Good luck and know that eventually you will get your feet back under you and be able to move ahead. Did you seek counsel from a lawyer who specializes in financial stuff, including bankruptcy. It is possible (though I know nothing of your finances other than the TS) that a bankruptcy would affect your credit less than a foreclosure. BK would be able to do away with the TS debt, and depending on which state you live in may not effect your home mortgage or car(s). It's possible that other debt can be discharged as well. You'd have to do the paperwork first to be able to know. Usually the initial assessment is at no charge to you.

Anyway, thanks for telling us and we look forward you your report of how this is progressing.

We wish you well, regardless.

Jim

 

[GoChiefsorBust]

Forgive me, not quite sure how to multi-quote yet:

Vacationhopeful - The settlement agreement as it stands is pretty fair. And it's not even an issue of holding someone accountable. The fact is, neither of us can spare any additional money to put aside to the timeshare. He has an obligation to pay child support for our child and his child from a previous marriage; that supersedes (to me) any timeshare payment. I'd rather him provide for his kids than make a Wyndham payment

Passeportout: I've been researching bankruptcy. That was my Plan C. Right now we owe $39K and some change on the TS; monthly maintenance fees are $149. I am the "breadwinner" and make enough money where people may tell me that it wouldn't make sense to file bankruptcy. I have no additional debt besides my mortgage and the TS (no student loans / credit cards / car loans / medical bills, etc), so I REALLY don't want to mess up my credit. However I found myself putting off groceries, gas, and commuting fees just so I had enough to put together for the TS payment. That's ridiculous.

I was thinking on the train ride home.....maybe I could tap into my 401K and deplete that (keeping in mind the tax penalty) to pay off Wyndham, and then I'll just have the $149/mo. to pay (which is reasonable). I don't necessarily want to do that....but if I have to I know it's an option. Not one I'm interested in pursuing. But I am open to advice. I don't want to mess up my credit. I take pride in honoring my obligations....and my STBXH is doing what he can; I can't fault him on that. We're just kinda STUCK.

Thanks for the replies so far; I appreciate it.

 

[ronparise]

In my opinion your "mistake" in the hardship application was continuing to pay during the process

Your application is designed to show that you can no longer make the payments. but you were paying. It just doesn't square.

 

[sjsharkie]

I was thinking on the train ride home.....maybe I could tap into my 401K and deplete that (keeping in mind the tax penalty) to pay off Wyndham, and then I'll just have the $149/mo. to pay (which is reasonable). I don't necessarily want to do that....but if I have to I know it's an option. Not one I'm interested in pursuing. But I am open to advice. I don't want to mess up my credit. I take pride in honoring my obligations....and my STBXH is doing what he can; I can't fault him on that. We're just kinda STUCK.

Thanks for the replies so far; I appreciate it.

Definitely do not tap into your 401k. Per your earlier post, you can't spare any additional money to put aside for the timeshare. Don't make things worse by paying of the loan with your retirement savings -- and then saddle yourself with ongoing mfs.

I know you don't want to mess up your credit, but it doesn't sound like you are buying any large assets soon. In any event, I believe it is far better to walk away and take a ding on your credit than deplete your retirement savings and have nothing to fall back on in an emergency or at retirement age. Just my 2 cents -- not a professional opinion. I'd stop paying and then see if you can work with Wyndham on doing a deed back.

Good luck to you.

-ryan

 

[GoChiefsorBust]

In my opinion your "mistake" in the hardship application was continuing to pay during the process

Your application is designed to show that you can no longer make the payments. but you were paying. It just doesn't square.

You have a point. I was making payments, albeit late.....but it's gotten to a point where I can no longer scrimp and pinch, even paying late. I suppose my sense of obligation really messed up my chances of getting a fair deal.

This is what bothers me. People will intentionally NOT pay because they hate Wyndham, or just don't want to be bothered. I try to do the right thing and it ends up working against me. I'm not pouting, but.....it's not fair

 

[GoChiefsorBust]

Definitely do not tap into your 401k. Per your earlier post, you can't spare any additional money to put aside for the timeshare. Don't make things worse by paying of the loan with your retirement savings -- and then saddle yourself with ongoing mfs.

I know you don't want to mess up your credit, but it doesn't sound like you are buying any large assets soon. In any event, I believe it is far better to walk away and take a ding on your credit than deplete your retirement savings and have nothing to fall back on in an emergency or at retirement age. Just my 2 cents -- not a professional opinion. I'd stop paying and then see if you can work with Wyndham on doing a deed back.

Good luck to you.

-ryan

Thank you Ryan. I don't want to mess with my 401K either, but this is scary. I'm not looking forward to the calls or the threats or the judgements...and then I was thinking, can they garnish wages? Can they try to take my home? Tomorrow I'm going to reach out to a few lawyers for free consultations. Just to see what they say about this. I'm not trying to buy a new car / open a new line of credit / buy a new house / buy ANYTHING, so if my score happens to drop, well then, I can deal with it and pay for things we need with cash. So much to process!

 

[Ty1on]

Thank you Ryan. I don't want to mess with my 401K either, but this is scary. I'm not looking forward to the calls or the threats or the judgements...and then I was thinking, can they garnish wages? Can they try to take my home? Tomorrow I'm going to reach out to a few lawyers for free consultations. Just to see what they say about this. I'm not trying to buy a new car / open a new line of credit / buy a new house / buy ANYTHING, so if my score happens to drop, well then, I can deal with it and pay for things we need with cash. So much to process!

Don't answer phone calls from unknown numbers. After foreclosure, you'll be offered to revise the credit report from "foreclosure" to "Settled for Less than Owed" for 15%-20% of the balance. If you don't see any major credit needs for 7 years or so, then you don't even need to entertain that.

They won't garnish or lien. They'll eventually just take back the ownership and report it as foreclosed.

 

[GoChiefsorBust]

Don't answer phone calls from unknown numbers. After foreclosure, you'll be offered to revise the credit report from "foreclosure" to "Settled for Less than Owed" for 15%-20% of the balance. If you don't see any major credit needs for 7 years or so, then you don't even need to entertain that.

They won't garnish or lien. They'll eventually just take back the ownership and report it as foreclosed.

This is good to know, thank you! NO major credit needs so I will definitely keep this in mind. I've decided (already) to drop Plan D (tap into my 401K) from the table. That's MY money; not Wyndham's!

 

[ronparise]

You have a point. I was making payments, albeit late.....but it's gotten to a point where I can no longer scrimp and pinch, even paying late. I suppose my sense of obligation really messed up my chances of getting a fair deal.

This is what bothers me. People will intentionally NOT pay because they hate Wyndham, or just don't want to be bothered. I try to do the right thing and it ends up working against me. I'm not pouting, but.....it's not fair

As a real estate agent in SW Flordia during our boom and bust, I saw a lot of short sales. The applicant had to do the same sort of applicaation to get a bank to approve a short sale and they were always declined as long as the applicant kept paying...as soon as he fell 3 months behind it would be approved

You are likely to be turned down any way because you have the assets (401k). I think you have to decide; borrow against the 401k, or stiff Wyndham and take a hit to your credit

I know what I would do, which is to stiff wyndham. Your credit score will come back, I promise.

 

[GoChiefsorBust]

As a real estate agent in SW Flordia during our boom and bust, I saw a lot of short sales. The applicant had to do the same sort of applicaation to get a bank to approve a short sale and they were always declined as long as the applicant kept paying...as soon as he fell 3 months behind it would be approved

You are likely to be turned down any way because you have the assets (401k). I think you have to decide; borrow against the 401k, or stiff Wyndham and take a hit to your credit

I know what I would do, which is to stiff wyndham. Your credit score will come back, I promise.

I appreciate the advice, truly. I was thinking just now how I am going to have to remind myself daily to give them the "silent" treatment. Meaning, where I would WANT to write and send a letter stating that I am unable to pay, and would like consideration into Wyndham taking the TS back and clearing me and the STBX from any obligation to them.....but this is Wyndham we're talking about. They're not always the most reasonable. I'm going to stick this process out. Since payment is due tomorrow and the 27th, I'll report back and let you know if they reach out to me, or let me sit.......

 

[Padad]

As a real estate agent in SW Flordia during our boom and bust, I saw a lot of short sales. The applicant had to do the same sort of applicaation to get a bank to approve a short sale and they were always declined as long as the applicant kept paying...as soon as he fell 3 months behind it would be approved

You are likely to be turned down any way because you have the assets (401k). I think you have to decide; borrow against the 401k, or stiff Wyndham and take a hit to your credit

I know what I would do, which is to stiff wyndham. Your credit score will come back, I promise.

Are retirement assets considered in such a hardship? See what happens after you don't pay for three months

Change your number at TS company to landline, then Cancel your landline.

Consider refi on your house, pay off TS, then give it away. Paying over 30 years is less of a cash flow hit.

 

[am1]

You have a point. I was making payments, albeit late.....but it's gotten to a point where I can no longer scrimp and pinch, even paying late. I suppose my sense of obligation really messed up my chances of getting a fair deal.

This is what bothers me. People will intentionally NOT pay because they hate Wyndham, or just don't want to be bothered. I try to do the right thing and it ends up working against me. I'm not pouting, but.....it's not fair

There is a lot to be said for honoring a debt. But look at it from Wyndhams eyes. You are more likely to continue to pay then someone who has stopped paying and late fees and compounded interest has made the amount owing a lot more then what was owed.

I am in favor of not allowing debts to be discharged. That would benefit honest people as interest rates would be lower and bank and other lending companies would be more willing to lend money.

 

[uscav8r]

You are likely to be turned down any way because you have the assets (401k). I think you have to decide; borrow against the 401k, or stiff Wyndham and take a hit to your credit

I know what I would do, which is to stiff wyndham. Your credit score will come back, I promise.

The 401k is a protected asset, at least from bankruptcy. Retirement assets are not generally considered liquid or current assets; I would not even bother listing these on the application.


Sent from my iPad using Tapatalk

 

[ronparise]

There is a lot to be said for honoring a debt. But look at it from Wyndhams eyes. You are more likely to continue to pay then someone who has stopped paying and late fees and compounded interest has made the amount owing a lot more then what was owed.

I am in favor of not allowing debts to be discharged. That would benefit honest people as interest rates would be lower and bank and other lending companies would be more willing to lend money.

The implication that folks in a financial bind are not honest, is just wrong

The honesty of lenders like Wyndham that will make loans to anyone to buy something worth about 10% of its sale price...not so much.. f... 'em I say

 

[alexadeparis]

I am in favor of not allowing debts to be discharged. That would benefit honest people as interest rates would be lower and bank and other lending companies would be more willing to lend money.

I don't even know where to start with this. SO misinformed. Banks get tax write offs for bad debts. I guarantee that it would NOT lower interest rates for anyone else, or make banks any more willing to lend money, by preventing people that can't pay from being discharged. Plus it's in the constitution. How would not allowing debts to be discharged help the person who can't pay their bills? And because they can't afford to pay their bills due to their life circumstances that makes them dishonest?!? And finally, how does this uninformed opinion help the OP?

 

[am1]

The implication that folks in a financial bind are not honest, is just wrong

The honesty of lenders like Wyndham that will make loans to anyone to buy something worth about 10% of its sale price...not so much.. f... 'em I say

Never implied that people in a financial bind are not honest. But people trying to make good on their debts are honest.

Wyndham as well as other timeshare sellers are not honest. We all know that and the government allows it.

 

[am1]

I don't even know where to start with this. SO misinformed. Banks get tax write offs for bad debts. I guarantee that it would NOT lower interest rates for anyone else, or make banks any more willing to lend money, by preventing people that can't pay from being discharged. Plus it's in the constitution. How would not allowing debts to be discharged help the person who can't pay their bills? And because they can't afford to pay their bills due to their life circumstances that makes them dishonest?!? And finally, how does this uninformed opinion help the OP?

If people were forced to honor their debts they would hopefully make better choices. Some would second guess a retail timeshare purchase and avoid this whole mess completely.

Less tax write offs for banks means the government would need to tax us less leaving more money in our pockets to stimulate the economy.

I do think if lenders were less likely to have to deal with defaults then interest rates would be lower.

People who cannot pay their bills are not dishonest but people who do when they can are honest.

 

[Bigrob]

Rather than liquidating your 401K, you could take a loan against it, use it to pay off the loan on the TS, then sell (yes, you should get something out of it, as Wyndham points contracts do have some value now) the timeshare, which will eliminate the maintenance fee portion and also get you back something (admittedly a small fraction of the initial cost.)

The interest rate on your loan "to yourself" is usually pretty reasonable, you're paying the money back to yourself, no credit hit, and the amount should be lower because you've eliminated high interest rate plus the maintenance fees.

The other thought of a home equity line would be worth considering too if there's room for it. Also the interest on a home equity loan is generally tax deductible.

But definitely do NOT liquidate the 401K and take the immediate tax hit plus 10% penalty. That would be the worst move you could make.

 

[CO skier]

This is good to know, thank you! NO major credit needs so I will definitely keep this in mind. I've decided (already) to drop Plan D (tap into my 401K) from the table. That's MY money; not Wyndham's!

You are absolutely correct. Do not tap your 401K either directly or through a loan to pay off the $39,000 timeshare. This is just sending good money, that you need to reserve for retirement, after bad.

Consult with some attorneys, but they do not work cheap. Only you can decide if it is worth a few thousand dollars for an attorney to walk you through defaulting on the timeshare (and possibly stopping any harassing phone calls), or if it is worth it for you on your own to just stop paying on the TS, re-filing the hardship package after 3 or 4 months, and if that does not succeed, putting up with the harassing phone calls. Either way, your credit score will suffer, but this is unavoidable.

A certain default percentage is built into these timeshare loans. Don't feel bad that the best solution is to default. You are just part of a larger statistical analysis. It is not fair, but that is how the system is designed.

It won't be easy, but I hope you make the best decision.

 

[GoChiefsorBust]

If people were forced to honor their debts they would hopefully make better choices. Some would second guess a retail timeshare purchase and avoid this whole mess completely.

Less tax write offs for banks means the government would need to tax us less leaving more money in our pockets to stimulate the economy.

I do think if lenders were less likely to have to deal with defaults then interest rates would be lower.

People who cannot pay their bills are not dishonest but people who do when they can are honest.

I'm not sure I'm following your comment? The only "poor" choice we (me and STBX) made was not buying the TS via resale . 3 years ago we could afford the payments and made them on time with no issue, as a married couple. Due to some situations and poor financial management decisions on his part, there is hardly any money left over at the end of the month (I count about $53.00 between the both of us) to make the payment. So I've been making late payments, or trying to put things on my credit card temporarily so that the things that are vital to me and my son (commuting, groceries, gas, his school payments, and my mortgage) are taken care of. But I can't keep this up, not for the sake of "making memories." Memories shouldn't run someone who is encountering an actual, legitimate life/finance change into the ground.

I'm truly hoping....that perhaps Wyndham will offer me a deed in lieu of foreclosure. I know it can happen, I just hope it can happen for US.

 

[GoChiefsorBust]

You are absolutely correct. Do not tap your 401K either directly or through a loan to pay off the $39,000 timeshare. This is just sending good money, that you need to reserve for retirement, after bad.

Consult with some attorneys, but they do not work cheap. Only you can decide if it is worth a few thousand dollars for an attorney to walk you through defaulting on the timeshare (and possibly stopping any harassing phone calls), or if it is worth it for you on your own to just stop paying on the TS, re-filing the hardship package after 3 or 4 months, and if that does not succeed, putting up with the harassing phone calls. Either way, your credit score will suffer, but this is unavoidable.

A certain default percentage is built into these timeshare loans. Don't feel bad that the best solution is to default. You are just part of a larger statistical analysis. It is not fair, but that is how the system is designed.

It won't be easy, but I hope you make the best decision.

Thank you for your recommendations. I slept on this and I am definitely not going to pull anything from my 401K. The thought of even obtaining another loan makes my stomach churn, so that's out of the question as well.

I believe I can put up with the harrassment. IF it gets really bad, I'll change my phone number, and my STBX has already changed his; I don't think it's on file. I was reading around the 'net last night and people had commented on other forums how they had requested a cancel of automatic payments, but they were still getting withdraws. "Luckily" for me, over the weekend my debit card was compromised so my bank had to issue me a new one. I'm DEFINITELY not giving Wyndham that information either! Funny how that worked out.....