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Defaulting on Worldmark The Club

bikertrash2007

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Hello all,
this is an update. Around March 2018 I posted for advice about getting out of my timeshare. I tried giving back my credits but WM will only take them back if they are paid off. I had contacted various exit companies, but the resale value was too low to cover the debt. I owed for 70,000 credits/points. Besides the enormous fees exit companies charged and my lack of trust, I decided to default instead in October 2018. I had been called and mailed numerous times to make a payment plan. At one glimmer of hope, I was sent a letter around May 2019 that suggested I call WM for an exit strategy. I called about 10 times, left 4 messages and did not receive a single response.
So I gave up.
In June 2019, WM updated 2 out of 3 credit bureaus that they repossessed the property. February 2020 I received a 1099-A for repossession of personal property. They put the value at double of what I owe. After discussing it with my tax lady and her top tax consultants and owner, we made a "wash" of it on my joint tax return. For 2019, it won't affect me. For 2020, I might take a hit if they cancel the debt with a 1099-C. If they do that, then I have to file a separate tax return from my husband and/or file BK.
Holding my breath that WM will no longer come after me. This is the reason I will not add my name to our home. Don't need a lien hanging over my head :/

So those of you considering defaulting, this is something to keep in the back of your mind. I will update if more info comes my way.
 

FunnyFarm

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Seems very weird that a club/points membership could be considered property that can be repossessed.
 

bikertrash2007

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Form 1099-A, Acquisition or Abandonment of Secured Property

My argument is that its a club and you purchase points. Doesn't matter because WM says otherwise.
 

cbyrne1174

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Considering 70,000 points is only worth about $10,000, it's still better than paying off the loan.
 

easyrider

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Wyndham is the company that handles all of the defaults. Not Worldmark. The reason that it seems like they are doubling the amount owed on the repossessed points is because there are other costs Wyndham owed Worldmark on the contract that Wyndham is obligated to pay.

Bill
 

bikertrash2007

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WM claims the value is over $130,000
 

cbyrne1174

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I've seen the prices go down to $0.15-0.20 per point on Ebay for larger contracts. That's why I haven't bought any resale points. Every year the MF have been going up and the resale prices have been going down.
 

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Iggyearl

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I don't know your tax lady, or how you handled the 2019 return, but here is an interesting article published by a well known Florida attorney. He mentions a number of IRS forms, and states a pretty good argument as to why the event should be non-taxable. However, he states more than once that he is not an accountant, and to do your own due diligence. Like the author states, it seems incredible that you can pay on a timeshare contract, loose the use of the timeshare - then be liable for forgiven debt. You ended up with nothing, and they resold your timeshare. Go figure........ :shrug:
 
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Eric B

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If they do their accounting on an accrual basis, which is likely, they reported the sale as income when it took place. The mortgage income from the interest would be more income on an ongoing basis as it accrues, though for a different business unit. Once there is a default, they have to write it off, which the IRS would allow and use the loss to reduce the corporation’s taxes. When they do that, they have to point to who defaulted so that Uncle Sam doesn’t get stiffed. If they didn’t act this way, they wouldn’t be doing right by their shareholders like @Fredflintstone. Might be a good reason to follow his lead and just buy stock in Wyndham and vacation using the dividends instead of buying a TS. ;)
 

talkamotta

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Thank you for telling us your experience. It amazes me that people sign for a timeshare without doing their due dilligence. I bought my first one from the developer, so I'm guilty of this, too. Mine was $5000 but it was many years ago. Would we buy a car without doing some research first? I wanted to kick myself when I saw the same thing I owned, for $900 on ebay, now I don't know if I could give it away. I learned fast....I do own worldmark but I bought my 41,000 credits almost fully loaded for $5000, no closing costs. I bought my wyndham 230k points with last year's usage free and no closing costs for $1. You still have to know how much mfs you can afford, knowing they will increase every year.
 

dgalati

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If they do their accounting on an accrual basis, which is likely, they reported the sale as income when it took place. The mortgage income from the interest would be more income on an ongoing basis as it accrues, though for a different business unit. Once there is a default, they have to write it off, which the IRS would allow and use the loss to reduce the corporation’s taxes. When they do that, they have to point to who defaulted so that Uncle Sam doesn’t get stiffed. If they didn’t act this way, they wouldn’t be doing right by their shareholders like @Fredflintstone. Might be a good reason to follow his lead and just buy stock in Wyndham and vacation using the dividends instead of buying a TS. ;)
Nows a good time to pickup some cheap shares.
 

dgalati

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Thank you for telling us your experience. It amazes me that people sign for a timeshare without doing their due dilligence. I bought my first one from the developer, so I'm guilty of this, too. Mine was $5000 but it was many years ago. Would we buy a car without doing some research first? I wanted to kick myself when I saw the same thing I owned, for $900 on ebay, now I don't know if I could give it away. I learned fast....I do own worldmark but I bought my 41,000 credits almost fully loaded for $5000, no closing costs. I bought my wyndham 230k points with last year's usage free and no closing costs for $1. You still have to know how much mfs you can afford, knowing they will increase every year.
Even if the purchase price is $0 I have found it cheaper to rent vs paying maintenance fees.
 

RX8

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@Grammarhero , I know you have been keeping track of defaults/credit bureau impact but I don’t see your name anywhere on this thread so notifying you just in case.
 

dagger1

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Even if the purchase price is $0 I have found it cheaper to rent vs paying maintenance fees.
That’s great renting works for you. Really good for last minute vacations. The places we want to go to (locations, size units, view, time of year) are almost never available, or rent for significantly higher than MF’s. That’s why we bought TS’s: to go where we want, when we want, in the unit size/view we want.
 

dgalati

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That’s great renting works for you. Really good for last minute vacations. The places we want to go to (locations, size units, view, time of year) are almost never available, or rent for significantly higher than MF’s. That’s why we bought TS’s: to go where we want, when we want, in the unit size/view we want.
I get the way it works for me may not work for all. Try to be open minded what works for you may not be cost effective for everyone. I just don't want the commitment of maintenance fees or being locked into one timeshare program. @Fredflintstone has another way to travel for less and it works for him.
 

dagger1

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I get the way it works for me may not work for all. Try to be open minded what works for you may not be cost effective for everyone. I just don't want the commitment of maintenance fees or being locked into one timeshare program. @Fredflintstone has another way to travel for less and it works for him.
Yes, I completely understand. Renting definitely works for some. For others, those who want to travel every year and need more certainty, TS’s are not only a more consistent method but also a more cost effective way to travel. Since this is a Timeshare forum, most here have weighed the options and decided owning is more beneficial to them. We enjoy prepaying our lodgings and planning our trips, knowing well in advance where/when we are going and what size/view our units are going to be.
 

Eric B

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Even if the purchase price is $0 I have found it cheaper to rent vs paying maintenance fees.
I just bought 5k for free all closing and transfer included
Some might note an internal inconsistency, but if it works for you....

When you're done with the 5k account and want to get rid of it, let me know. That would put me at an even 30K for the long term. Thanks!
 

dgalati

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Some might note an internal inconsistency, but if it works for you....

When you're done with the 5k account and want to get rid of it, let me know. That would put me at an even 30K for the long term. Thanks!
What do I have to lose? It was free with low maintenance fees. I figured why not see what World Mark has to offer. I will let you know if I sell it. I will use all credits for this year and next year before I get rid of it. It is a July use year.
 

dagger1

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What do I have to lose? It was free with low maintenance fees. I figured why not see what World Mark has to offer. I will let you know if I sell it. I will use all credits for this year and next year before I get rid of it. It is a July use year.
You are going to like it. Enjoy!
 

dgalati

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You are going to like it. Enjoy!
Thanks, I"m looking forward to seeing how it all works. Looks like the program is a little different then Wyndham's. What do you think WorldMark has to offer over Wyndham?
 
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