Help...can't pay my timeshares anymore...what to do?

[calgarygary]

You have thus far spent $40K with a $50K balance on 2 or more timeshares (you used plural) and mentioned a salesperson that sold your last installment. Is it safe to surmise that the balances on the loans are not equal and that you have varying amounts of equity in each? I strongly suggest that you view eBay sales history to try to get a handle on the value of each of your contracts. If you have purchases within premier systems such as Starwood, Marriott, etc., then you might want to explore selling them. It is quite possible that if you utilize a proper closing procedure, that you might be able to dispose of these "assets" with a minimal amount of $ to pay the balance between your net sales price and the loan. As the credit markets in Canada are not as tight as in the U.S., you might be able to obtain an LOC or 2nd mortgage (if you own) to satisfy the difference. If however you have purchased from a system where the value has decreased substantially below 50% (75-90%) then you should consider walking away and taking the expected hit to your credit rating and possibly facing a civil suit. To minimize the damage, I would draft a letter to your creditor (not necessarly who you purchased from) outlining your current financial situation, clearly stating your inability to continue payments, and advising them that future civil action will result in $0 gain to the creditor (assuming that you have no assets that could be liquidated to satisfy this loan and possible judgement) and that you are prepared to return the deeds. If you are prepared to face the consequences, ie forclosure and possible suit leading to bankruptcy (?) then that might be your only option.

It will likely depend upon the company that holds your note as to whether they will chase you in Canada - use the internet as a tool to determine this likelihood.

 

[oregonguy]

Being a Canadian, I don't know anything about foreclosures and the consequences

Come on - It doesn't work that differently in Canada. If you don't pay your mortgage, they foreclose in Canada. They also have legal options to extract the money from you. Both of our legal systems have the same root - some of the laws are of course different, but the basic concepts are the same.

 

[ricoba]

Here's what I am curious about.

The OP puts a $ symbol at the end of the amount, yet all of Canada as far as I know puts the $ in front of the amount, just like calgarygary did in the post just prior to this one.

I am almost certain that even in Quebec, they follow this.

Now I am not saying this isn't a legitimate post, but I am curious about the nature of it.

 

[Stefa]

They also have legal options to extract the money from you.

I don't believe this is correct. They can take back their timeshare and the foreclosure will hurt your credit rating, but they cannot come after you to pay off the loan. Much like when a home is foreclosed on.

 

[oregonguy]

I don't believe this is correct. They can take back their timeshare and the foreclosure will hurt your credit rating, but they cannot come after you to pay off the loan. Much like when a home is foreclosed on.

You're wrong - google the term "deficiency judgment" - Depending where you live or own the property, you could possible be sued in addition to losing your property and credit rating.

 

[oregonguy]

Here's what I am curious about.

The OP puts a $ symbol at the end of the amount, yet all of Canada as far as I know puts the $ in front of the amount, just like calgarygary did in the post just prior to this one.

I am almost certain that even in Quebec, they follow this.

Now I am not saying this isn't a legitimate post, but I am curious about the nature of it.

Nope, the French put it to the right, not the left - and so does Quebec. The rest of Canada is on the left just like in the US.

They tend to use commas instead of periods, and when you see a street sign that has the time on it, it is is military time (i.e. not 5pm, but 1700h)

 

[AwayWeGo]

Inflated Prices Of Full-Freight Timeshares.

You're wrong - google the term "deficiency judgment" - Depending where you live or own the property, you could possible be sued in addition to losing your property and credit rating.

I remember reading somewhere -- most likely here on TUG-BBS some years back -- that in Florida & possibly elsewhere, the courts are so well tuned in to the grossly inflated prices of full-freight timeshares that when a timeshare foreclosure & repossession action is filed by a timeshare company (or by a 3rd party holding a timeshare-secured mortgage flipped from a timeshare company), the 1st thing the court does is cut the original amount of the note in half. Then they take it from there.

True ?

False ?

Who knows ?

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

 

[calgarygary]

You're wrong - google the term "deficiency judgment" - Depending where you live or own the property, you could possible be sued in addition to losing your property and credit rating.

This actually brings up an interesting discussion. In the situation regarding a home, the mortgage company can dispose of the asset and the balance is either written off or in some cases, the mortgage company could use the courts to obtain the balance. In the case of a repo'd timeshare, could the defendant not argue that the balance is owed him if the seller holds the note - full freight minus costs of course.

 

[lark]

This actually brings up an interesting discussion. In the situation regarding a home, the mortgage company can dispose of the asset and the balance is either written off or in some cases, the mortgage company could use the courts to obtain the balance. In the case of a repo'd timeshare, could the defendant not argue that the balance is owed him if the seller holds the note - full freight minus costs of course.

It's really hard for anyone to say exactly what the situation is here, without seeing the actual signed and recorded documents.

In the U.S., states generally fall into two categories: Recourse and non-recourse states. In a non-recourse state, the lender GENERALLY cannot seek a judgment on the note after it has foreclosed, for any deficiency. In a recourse state, the lender typically can. Not every statute is the same, though. Some non-recourse state statutes may or may not apply in different circumstances, and the application to timeshares depends on the particular jurisdiction.

But, again, this is a situation in which it's difficult to give advice without knowing exactly what the documents say. The amount at stake here sounds as though it would warrant consultation with counsel in the relevant jurisdiction.

 

[calgarygary]

It's really hard for anyone to say exactly what the situation is here, without seeing the actual signed and recorded documents.

In the U.S., states generally fall into two categories: Recourse and non-recourse states. In a non-recourse state, the lender GENERALLY cannot seek a judgment on the note after it has foreclosed, for any deficiency. In a recourse state, the lender typically can. Not every statute is the same, though. Some non-recourse state statutes may or may not apply in different circumstances, and the application to timeshares depends on the particular jurisdiction.

But, again, this is a situation in which it's difficult to give advice without knowing exactly what the documents say. The amount at stake here sounds as though it would warrant consultation with counsel in the relevant jurisdiction.

The part of my quote about an interesting discussion wasn't meant as advice to the op but rather a general discussion point. In those states where recourse is available, the property would likely be auctioned by the note holder, and net proceeds applied to determine the amt. that could be litigated for. However, with a timeshare, where the note is held by the developer, could one not argue that the value of the ts is what the developer is currently obtaining, thereby negating any opportunity for the developer to sue. Just a thought!

 

[lark]

The part of my quote about an interesting discussion wasn't meant as advice to the op but rather a general discussion point. In those states where recourse is available, the property would likely be auctioned by the note holder, and net proceeds applied to determine the amt. that could be litigated for. However, with a timeshare, where the note is held by the developer, could one not argue that the value of the ts is what the developer is currently obtaining, thereby negating any opportunity for the developer to sue. Just a thought!

Again, it depends on a lot of stuff. For example, if it's a deed of trust that has been executed, a trustee sells the property, and the note holder would usually make a credit bid (not a cash bid) for the amount owed on the note. The amount that a willing bidder is willing to pay, even if it's a credit bid, will usually be presumptively (but not dispositively) deemed fair market value.

I mean, if you're sued for a deficiency, it's pretty hard to argue that the amount paid for the TS was not fair market value if it was a public sale. If no amount more than the credit bid is bid by a buyer, how do you establish that the market is more? That said, I have no idea if TS developers or note holders have the inclination to go bringing suits for deficiencies, even in deficiency states. Seems like a waste of money, but I really have no idea if it's a common practice.

 

[oregonguy]

That said, I have no idea if TS developers or note holders have the inclination to go bringing suits for deficiencies, even in deficiency states. Seems like a waste of money, but I really have no idea if it's a common practice.

I don't know if it is common practice either. I don't have any information on this, but I have to believe that a decent percent of timeshare owners are also homeowners. One reason not to pursue this would be that the person they are going after is judgment proof - doesn't own anything. If a timeshare owner defaults, they likely will still have their own house. All the timeshare company would need to do is get a judgment and file a lien against the owner's house.

 

[TUGBrian]

since when is it ok to laugh at someone for being taken by a developer for a significant amount of money.

some of you should be ashamed, this site exists to educate and help...not ridicule.

 

[oregonguy]

since when is it ok to laugh at someone for being taken by a developer for a significant amount of money.

some of you should be ashamed, this site exists to educate and help...not ridicule.

Where do you see ridicule?

 

[sjuhawk_jd]

Wyndham

I can bet $50 that the OP owns Wyndham. This type of MFs ($1300 per month) can be attributed to Wyndham type ownership.

 

[TUGBrian]

Where do you see ridicule?

those posts were deleted.

 

[oregonguy]

those posts were deleted.

Thanks for clarification. I read through the thread and said where's the ridicule, but not being there was why I missed them lol

 

[JMAESD84]

I'm sorry for your troubles, but I can't believe you agreed to this.

Simple disbelief that someone would have entered into such an agreement, is not ridicule.

I feel sorry for the OP if it they have truely been taken advantage of to the extent that they've posted here and I hope that they find some helpful way(s) out of their situation.

 

[TUGBrian]

disbelief is one thing, laughing at the person is another.

again, the two comments were deleted.

 

[jdetar]

Can anyone help me? I have had timeshares since 2006. I have given over 40000$ so far...I have still 50000$ to pay on my timeshare mortgage. I have lost my job on account of health reasons...I have found a new job, however, I am making a lot less money...almost half of my old salary...so I don't have the money to pay 1300$ a month for the Timeshares and still have 9 years to go on the mortgage...Is there a way on negotiating with the Timeshare company to settle for the amount of points that 40000$ is worth...or do I just lose everything?

just let them foreclose. seriously, there comes a time where you need to cut your losses a move on. look at it like this, it was a mistake and you're out $40K already, but you'll be out another $50K if you manage to keep paying! plus the headache in your life if you can even afford to do it.

walk away, let them foreclose, it's worth the credit ding. when you're ready, go buy a cheap resale timeshare and trade for where you want to go.

 

[oregonguy]

it's worth the credit ding

I'm not necessarily disagreeing with your advice, but a foreclosure is a lot more than a "ding" - a late payment is a ding. A foreclosure is a trainwreck for your credit - at least for many years to come.

 

[jdetar]

Think about it, we're talking about a $50K additional cost, or a foreclosure of a timeshare. Do you really think a foreclosure will cost him $50K in additional losses due to increased credit or troubles for the next few years? I highly doubt it. I happen to know a lot about credit and can tell you that you would be highly surprised what some creditors feel about this, especially in the next year or so when we start coming out of this economic mess. The damages will not be as bad.

What he should do first is take care of any short to medium term needs for credit right away. Ie: insurances, line's of credit, mortgage refi's, credit cards, etc. Once the foreclosure hits it will be tougher, and some rates will be higher but unless he's in the real estate business or has over $100K of CC debt the damages will never reach $50K.

 

[e.bram]

In the future the value of the assets backing the credit will take front seat in credit granting. If the asset behind the credit is good the credit is good. The credit worthyness of the borrower will take a back seat.

 

[ace2000]

Think about it, we're talking about a $50K additional cost, or a foreclosure of a timeshare. Do you really think a foreclosure will cost him $50K in additional losses due to increased credit or troubles for the next few years? I highly doubt it. I happen to know a lot about credit and can tell you that you would be highly surprised what some creditors feel about this, especially in the next year or so when we start coming out of this economic mess. The damages will not be as bad.

What he should do first is take care of any short to medium term needs for credit right away. Ie: insurances, line's of credit, mortgage refi's, credit cards, etc. Once the foreclosure hits it will be tougher, and some rates will be higher but unless he's in the real estate business or has over $100K of CC debt the damages will never reach $50K.

This discussion would be an interesting debate in it's own thread. Jdetar, I appreciate you sharing this advice with candor and clarity. I feel you are truly concerned about the OP.

In my opinion, I think that so many on TUG are trying to protect their own timeshare investments, and in turn giving out very poor advice to individuals in the same predicament as the OP. I've seen it time and time again.

 

[oregonguy]

Think about it, we're talking about a $50K additional cost, or a foreclosure of a timeshare. Do you really think a foreclosure will cost him $50K in additional losses due to increased credit or troubles for the next few years? I highly doubt it. I happen to know a lot about credit and can tell you that you would be highly surprised what some creditors feel about this, especially in the next year or so when we start coming out of this economic mess. The damages will not be as bad.

What he should do first is take care of any short to medium term needs for credit right away. Ie: insurances, line's of credit, mortgage refi's, credit cards, etc. Once the foreclosure hits it will be tougher, and some rates will be higher but unless he's in the real estate business or has over $100K of CC debt the damages will never reach $50K.

If you carefully read my post, you will see that I preface it with saying I don't necessarily disagree with your advice. My issue was calling a foreclosure a "ding" - I happen to know a lot about how credit works as well, and to call it a ding suggests a profound lack of understanding of how things work when it comes to credit. Additionally, if the OP owns property, they could come after them for damages (see my earlier post on deficiency judgment) - just because this may not be commonplace now doesn't mean it won't be a strategy to satisfy a debt in the future. Zombie debt collectors could also create havoc in your life.

That being said, if I were in a similar position (which I can't imagine being in the positition) Foreclosure might be the best option - $50,000 is a huge number when you can't afford payments. It is better to make sure the OP keeps their original house than their timeshare.