Seeking advice for family member [Unloading Silverleaf w/mortgage]

[siuvinson]

Hi all!

I have a close family member that bought into a Silverleaf timeshare several years ago, and due to a variety of circumstances, can no longer afford the monthly payments. I know very little about the way timeshares work, and I'm simply trying to educate myself on the various ways I can help this family member rid themselves of a hefty monthly expense that they cannot afford, and at the same time try to salvage their financial health/security for their upcoming retirement years. I do know that in this person's case, they are under contract as an owner and are making monthly payments (plus interest) to satisfy an unknown valuation; but at this time that's pretty much the extent of my knowledge.

So, if anyone could help educate me, or point me in the direction of online resources that I can read through, I'd very much appreciate it. Interested in any/all options here; selling, foreclosing, bankruptcy, negotiating w/ the timeshare group, etc. Don't really know what kind of effects each option can have.

thank you!

 

[natasha5687]

You could try contacting the resort and asking if they will allow you to give it back. You may have to call several times and to several departments but dont give up. This may not work but it's worth a try.

 

[theo]

Don't shoot the messenger, but...

I have a close family member that bought into a Silverleaf timeshare several years ago, and due to a variety of circumstances, can no longer afford the monthly payments. I know very little about the way timeshares work, and I'm simply trying to educate myself on the various ways I can help this family member rid themselves of a hefty monthly expense that they cannot afford, and at the same time try to salvage their financial health/security for their upcoming retirement years. I do know that in this person's case, they are under contract as an owner and are making monthly payments (plus interest) to satisfy an unknown valuation; but at this time that's pretty much the extent of my knowledge.

So, if anyone could help educate me, or point me in the direction of online resources that I can read through, I'd very much appreciate it. Interested in any/all options here; selling, foreclosing, bankruptcy, negotiating w/ the timeshare group, etc. Don't really know what kind of effects each option can have.

The unfortunate but blunt truth is that any timeshare (certainly including Silverleaf) on which (as you have indicated) there is still an outstanding loan / mortgage has essentially zero resale value --- zippo, nada, none. Simply stated, there are plenty of fully paid off, debt-free timeshares around being openly offered for free (including many right here on this web site) to any interested new recipient. Silverleaf (and / or any other developer) is highly unlikely to consider "negotiations" of any sort when there is still outstanding debt involved on the initial contract and purchase. While they might consider a "deedback" (i.e., accept deed in lieu of foreclosure) for a fully paid up ownership, that's just not an option a developer will entertain with associated debt still involved.

Stopping any and all further loan payments and / or maintenance fee payments will inevitably lead to foreclosure --- with associated negative credit report consequences. If such negative credit reporting consequences are of no particular concern to your family member(s), then defaulting followed inevitably by foreclosure will at least bring immediate cessation to the financial "bleeding" associated with continuing to pay out good money for a nearly worthless "product". Any and all money paid to date will of course be forfeited in that scenario. I am certainly not advocating or recommending defaulting, but merely pointing out that it is indeed an option to contemplate if the short term goal is to stop paying out money that the party cannot afford to send off to never-never land, with absolutely no prospect of any future financial return.

It's a tough spot. I admire and applaud your willingness to intervene and try to assist a family member, but you should clearly know and accept right from the git go that the underlying "product" has little or no resale market value --- and even less still with its' attached debt. I can only wish you good luck.

 

[siuvinson]

Thanks to both of you for your responses.

Based on conversations with the family member, and brief research I'd done prior to posting here, I knew already of the value (or lack thereof) in this timeshare.

"Financial Bleeding" is the exact term to explain the current situation; in excess of $400 per month is lost every month this continues. I believe a pay-off value is in the range of $30k, I don't yet know what remains on that amount. Full responsibility is accepted by this family member; they're not looking to blame anyone but themselves (regardless of Silverleaf selling practices, it still falls back on the person who signed the dotted line). Sometimes people make mistakes; unfortunately this was a rather costly one, and as family we'll help them get past it.

In regards to contacting Silverleaf and asking to get out; its an option currently on the table. BUT, we want all possible options identified first, so we can exercise the correct option, at the correct time, in the correct order. As things escalate, I want to know we tried our best.

In regards to walking away from it; also an option being researched. Obviously credit rating impact is the downfall. But given the age of the family member and their personal circumstances, we haven't ruled it out yet.

Another option, to which we came up with randomly and with no proven logic,
would coincide with the sale of this family member's home. They stand to make a modest profit; in the neighborhood of $10k. After the sale of their home, they plan to downsize and rent for several years. Considering such, we had a thought of arranging a meeting with Silverleaf and offering a lump sum "buyout" if you will. Given the fact that we're looking at ~$5k per year going down the drain, and 3+ yrs worth of payments, it would save money.

I don't know how realistic that idea is, but my thought process would be to give Silverleaf the option of taking a lump sum, or facing a foreclosure on the property and dealing with someone who has no real financial assets to be seized.

thoughts?

 

[Passepartout]

If that family member is truly in those financial straits, perhaps a bankruptcy would get them out from under the negative 'asset' of the timeshare, and the home would be safe under the homestead exemption. That could allow them to get a fresh start before retirement.

I'm sure there are more details of their financial life that we don't need to know, but that should be considered. I would encourage them to visit with a lawyer in their area who has specialty in bankruptcy.

Best wishes for a favorable outcome.

Jim

 

[MagdalenaLBoyd]

Hi all!

I have a close family member that bought into a Silverleaf timeshare several years ago, and due to a variety of circumstances, can no longer afford the monthly payments. I know very little about the way timeshares work, and I'm simply trying to educate myself on the various ways I can help this family member rid themselves of a hefty monthly expense that they cannot afford, and at the same time try to salvage their financial health/security for their upcoming retirement years. I do know that in this person's case, they are under contract as an owner and are making monthly payments (plus interest) to satisfy an unknown valuation; but at this time that's pretty much the extent of my knowledge.

So, if anyone could help educate me, or point me in the direction of online resources that I can read through, I'd very much appreciate it. Interested in any/all options here; selling, foreclosing, bankruptcy, negotiating w/ the timeshare group, etc. Don't really know what kind of effects each option can have.

thank you!

Perhaps I should know by the name but where is Silverleaf? Florida?

The reason I ask is that in Florida you don't have to worry about the developer going after other assets but my understanding is that some states do allow this. Whether developers actually do garnish wages or seize bank accounts, I don't know.

 

[theo]

A thought...

Another option, to which we came up with randomly and with no proven logic,
would coincide with the sale of this family member's home. They stand to make a modest profit; in the neighborhood of $10k. After the sale of their home, they plan to downsize and rent for several years. Considering such, we had a thought of arranging a meeting with Silverleaf and offering a lump sum "buyout" if you will. Given the fact that we're looking at ~$5k per year going down the drain, and 3+ yrs worth of payments, it would save money.

I don't know how realistic that idea is, but my thought process would be to give Silverleaf the option of taking a lump sum, or facing a foreclosure on the property and dealing with someone who has no real financial assets to be seized.

thoughts?

You are certainly wise to carefully consider and very closely examine all options and their potential consequences, but I for one will offer no support for the option of offering Silverleaf a "cash buyout" (an offer which Silverleaf will almost certainly not consider or accept anyhow, unless for the full outstanding mortgage balance).

Think of it this way; this financially burdensome "asset" is essentially worthless and it has been (and will continue to be) draining money from limited available funds, each and every month. Frankly, I think a noble goal would be to stop that "bleeding" --- completely and ASAP. Every cent paid into this worthless "asset" is money just needlessly thrown away, in my personal opinion. Throwing an additional "lump sum" in Silverleaf's direction would, IMnsHO, just add further insult to existing injury.

You'll come to your own decisions and conclusions, but give some serious consideration to just letting Silverleaf know in no uncertain terms, before even one more check gets written, that not one cent more is coming their way from this moment forward --- and let them foreclose. Your folks won't ever see any money back from this "ownership" in any possible scenario, so why voluntarily choose to just keep mailing away more of their limited financial resources to Silverleaf each and every month?

Who needs that money more --- your aging family members in a financial bind, trying to salvage, plan for and protect their future, or Silverleaf, just passively and happily receiving monthly checks for fees, loan principal and loan interest on the vaporous (and financially worthless) fuzzy notion of "future vacation dreams"?

This input is not offered or intended as legal advice, but is instead just my personal opinion, freely and voluntarily expressed and shared as potential food for thought.

 

[csxjohn]

+1 for this post!!

There is no way in the world I would offer any kind of buyout amount.

Let them know they are not getting one more penny and let them make the next move.

I would offer to sign everything over to them if they agree to no negative hits to credit. If they don't agree then I'd just let them foreclose which will cost them much more than accepting the deed back.

These are my opinions of how I'd handle it if I were in a similar situation and in no way should be considered legal advice.

You are certainly wise to carefully consider and more closely examine all options and their potential consequences, but I for one will offer no support for the option of offering Silverleaf a "cash buyout" (an offer which Silverleaf will almost certainly not consider or accept anyhow, unless for the full mortgage balance still outstanding).

Think of it this way; this financially burdensome "asset" is essentially worthless and it has been (and will continue to be) draining money from limited available funds, each and every month. Frankly, I think a noble goal would be to stop that "bleeding" --- completely and ASAP. Every cent paid into this worthless "asset" is money just needlessly thrown away, in my personal opinion. Throwing away an additional "lump sum" would just add further insult to injury.

You'll come to your own decisions and conclusions, but give serious consideration to letting Silverleaf know in no uncertain terms, before even one more check gets written, that not one cent more is coming their way from this moment forward. Let them foreclose. Your folks won't see any money back from this matter in any scenario, so why voluntarily choose to just keep mailing away more of their limited financial resources every month?
Who needs that money more --- your aging family members in a financial pinch trying to salvage their future, or Silverleaf passively collecting fees (and loan principal and interest) on a vaporous and financially worthless concept of "vacation dreams"?

This input is not offered or intended as legal advice, but is instead just my expressed personal opinion, shared as potential food for thought.

 

[siuvinson]

Thank you all for your advice, you've all been a great help!

I'll be talking with other family members this week and hopefully we can come to an agreement on a course of action. Before any decisions are made, legal advice will absolutely be sought; we actually have personal relationships with both a real estate lawyer and bankruptcy lawyer.

Thanks again!

 

[theo]

There is "real estate" --- and then there are "Intervals on Planet Timeshare"...

Thank you all for your advice, you've all been a great help!

I'll be talking with other family members this week and hopefully we can come to an agreement on a course of action. Before any decisions are made, legal advice will absolutely be sought; we actually have personal relationships with both a real estate lawyer and bankruptcy lawyer.

Thanks again!

Timeshares (a.k.a. interval ownership) are a bit unique and may be unfamiliar territory to your "real estate" attorney. Deeded timeshare ownership is often (i.e., when not just a "right to use" (RTU) contract) actual "real estate" in one sense, but it's also "real estate" with no intrinsic resale / underlying financial value (regardless of the contrived, artificial and completely meaningless original purchase price figures). The inherent "value" is in the vacation access --- certainly not in any "cash money".

This situation is every bit as much a contract matter as a "real estate" matter. The loan was surely not from a bank lender, but was either via "internal corporate financing" within Silverleaf or via some other third party financing mechanism. Just be aware that this may all be unfamiliar territory to a "real estate" attorney.

You're a good person, looking out for the elders as best as you possibly can. I tip my cap to you and to your concern and your efforts, wishing you luck and success.