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Defaulting on Club Wyndham TS in Alaska

chuckylee

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Hey everyone,

I'm reaching out for some advice and insights regarding the ramifications of defaulting on a timeshare loan with Club Wyndham, specifically living in Alaska.

My wife and I made the unfortunate decision to purchase a timeshare with Club Wyndham, and the monthly payments are now causing significant financial strain. We find ourselves cutting back on essentials like groceries and outings just to make ends meet, and the stress is taking a toll on our personal lives, especially with a new child.

I have a few questions that I hope some of you might have experience or knowledge about:

  1. Legal Consequences in Alaska: Can Club Wyndham come after my house or garnish wages if I default on the timeshare loan? I understand that laws can vary by state, so I'm particularly interested in how Alaska handles such situations.
  2. Writing Letters: I've seen some people mention writing letters to the timeshare company. Can anyone elaborate on what this entails? What are the goals, and what kind of responses have people received?
  3. Tax Implications: What are the potential tax repercussions if Club Wyndham forecloses on the timeshare? I'm concerned about any additional financial burdens that might arise from this.
  4. Penalties: Lastly, what kind of penalties should I expect if I default on the timeshare loan? I want to be prepared for any consequences that may come my way.
  5. Grandparents have approximately 1 million points and founders status, if we default are we ineligible to inherit these?

I appreciate any insights or advice you can offer. Thank you in advance for your help!
 

Fido Chuckwagon

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Hey everyone,

I'm reaching out for some advice and insights regarding the ramifications of defaulting on a timeshare loan with Club Wyndham, specifically living in Alaska.

My wife and I made the unfortunate decision to purchase a timeshare with Club Wyndham, and the monthly payments are now causing significant financial strain. We find ourselves cutting back on essentials like groceries and outings just to make ends meet, and the stress is taking a toll on our personal lives, especially with a new child.

I have a few questions that I hope some of you might have experience or knowledge about:

  1. Legal Consequences in Alaska: Can Club Wyndham come after my house or garnish wages if I default on the timeshare loan? I understand that laws can vary by state, so I'm particularly interested in how Alaska handles such situations.
  2. Writing Letters: I've seen some people mention writing letters to the timeshare company. Can anyone elaborate on what this entails? What are the goals, and what kind of responses have people received?
  3. Tax Implications: What are the potential tax repercussions if Club Wyndham forecloses on the timeshare? I'm concerned about any additional financial burdens that might arise from this.
  4. Penalties: Lastly, what kind of penalties should I expect if I default on the timeshare loan? I want to be prepared for any consequences that may come my way.
  5. Grandparents have approximately 1 million points and founders status, if we default are we ineligible to inherit these?

I appreciate any insights or advice you can offer. Thank you in advance for your help!
1. Legal Consequences: Extremely unlikely to basically impossible. Alaska appears to be a non-deficiency foreclosure state. I wouldn’t lose sleep about this especially if you are struggling to pay other bills.

2. Writing letters: You can try, I wouldn’t hold your breath;

3. Tax implications: It’s possible you could owe taxes on the “forgiven” timeshare loan.

4. Penalties: Not really sure what you mean by this.

5. Can’t comment on this, but i really wouldn’t have it be a calculation right now.
 

dioxide45

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What exactly do you own? Where you live has no bearing on deficiency. It matters where the property is located or where the timeshare plan is registered. Do you own Club Wyndham Access?
 

geist1223

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Many times the Purchase Contract will say which State's Laws Apply. Normally the State where the Contract was Executed.
 

chuckylee

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What exactly do you own? Where you live has no bearing on deficiency. It matters where the property is located or where the timeshare plan is registered. Do you own Club Wyndham Access?
We own club 400k pts Wyndham Prefer west, we purchased in Anaheim last year. On the site it just shows Club Wyndham Plus.
 

chuckylee

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Many times the Purchase Contract will say which State's Laws Apply. Normally the State where the Contract was Executed.
I’ll take a look tonight and get back to you. We purchased in CA
 

Fido Chuckwagon

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What exactly do you own? Where you live has no bearing on deficiency. It matters where the property is located or where the timeshare plan is registered. Do you own Club Wyndham Access?
Yeah I misread the post as a Wyndham property located in Alaska.
 

dioxide45

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We own club 400k pts Wyndham Prefer west, we purchased in Anaheim last year. On the site it just shows Club Wyndham Plus.
I understand that is a legacy Shell program. Perhaps a trust setup. Do you know if it is deeded?
 

chuckylee

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I understand that is a legacy Shell program. Perhaps a trust setup. Do you know if it is deeded?
My understanding is that it’s a trust. Do you know if there is a difference when it comes to the proceedings after foreclosure?
 

Grammarhero

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If a trust, the location of the trust is usually where litigation takes place. For CWA, would be delaware, a very corporation friendly state.
 

rickandcindy23

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I understand that is a legacy Shell program. Perhaps a trust setup. Do you know if it is deeded?
400 points in Shell is a very small number. I cannot imagine that cost a lot to buy. Is it 4,000 points?

We own 25,500 points in Shell. I can tell you that 400 points only gets a few weeknights a year in Anaheim.

I thought Wyndham was pushing their own Wyndham points at timeshare presentation and leaving the Shell points to rot in the grave.

Maybe you have 400,000 Wyndham points? That number is so small.
 

paxsarah

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400 points in Shell is a very small number. I cannot imagine that cost a lot to buy. Is it 4,000 points?

We own 25,500 points in Shell. I can tell you that 400 points only gets a few weeknights a year in Anaheim.

I thought Wyndham was pushing their own Wyndham points at timeshare presentation and leaving the Shell points to rot in the grave.

Maybe you have 400,000 Wyndham points? That number is so small.
They said 400k in Club Wyndham Prefer West, which is just regular Club Wyndham denomination in terms of currency. The ARP is in the non-Hawaii originally Shell resorts.
 

rickandcindy23

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Funny that I didn't see the k.

Shell is called West Club or Hawaii Club and another one.
 

chuckylee

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If a trust, the location of the trust is usually where litigation takes place. For CWA, would be delaware, a very corporation friendly state.
What’s the worst case scenario? I’m having difficulty finding the state on all my documents?
 

Fido Chuckwagon

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What’s the worst case scenario? I’m having difficulty finding the state on all my documents?
Realistically nobody is going to be able to give you an answer with absolute certainty, but as far as I am aware there are no known instances of a timeshare company pursuing a post-foreclosure judgment by attempting to garnish wages or put a lien on property. This makes sense as the effort of doing this for someone who lives in another state would make it unappealing for any rational creditor. Your realistic worst-case scenario is probably a ding to your credit and a lot of scary collections letters/calls (but you can get them to stop calling you under the FDCPA by notifying them in writing that you are only to be contacted by mail).
 

dioxide45

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Realistically nobody is going to be able to give you an answer with absolute certainty, but as far as I am aware there are no known instances of a timeshare company pursuing a post-foreclosure judgment by attempting to garnish wages or put a lien on property. This makes sense as the effort of doing this for someone who lives in another state would make it unappealing for any rational creditor. Your realistic worst-case scenario is probably a ding to your credit and a lot of scary collections letters/calls (but you can get them to stop calling you under the FDCPA by notifying them in writing that you are only to be contacted by mail).
I would agree, though we have seen timeshare companies issue 1099-C for the debt they write off. This could have a substantial tax implication. Though likely still less than the outstanding timeshare loan.
 

Fido Chuckwagon

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I would agree, though we have seen timeshare companies issue 1099-C for the debt they write off. This could have a substantial tax implication. Though likely still less than the outstanding timeshare loan.
Yeah, this is possible, although it gets into super-complex areas of tax law as I believe forgiveness of a non-recourse loan is not taxable, and whether or not a mortgage on a timeshare would qualify as a non-recourse loan is not an easy question to answer, and is probably state by state dependent. Essentially, you're likely not going to have to pay taxes on a loan forgiven that is secured against property that has been foreclosed upon when the property sells at auction for less than what you owe.*

*Caveat: I am not a tax attorney

Edit: This page from IRS.gov goes into this a little more, although specific to primary home foreclosure and not vacation property foreclosure: https://www.irs.gov/newsroom/home-foreclosure-and-debt-cancellation
 
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TUGBrian

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while its true the foreclosure and any judgement (never happens) would take place in the state the timeshare exists in...should a judgement actually happen said judgement would have to be domesticated in the state the individual resides in and also is subject to that states collections laws.

the cost to seek a judgement, go thru the domestication process, and then make an effort to collection the money combined with the significant negative exposure of "suing your owners" means the chance of this happening to your average owner is almost nonexistant.

and explains why it never happens.
 
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