Let me state upfront that I am not an attorney nor an expert on Florida real estate law as pertains to timeshares. However, an attorney (whose TUG name is/was Grammarhero) who seemed quite knowledgeable about Florida timeshare law (and, indeed, did research on timeshare law in every state in the US) posted the following on TUG:
@TUGBrian @DeniseM @CalGalTraveler take a look. This weekend, I’m creating a spreadsheet with official links to states’ timeshare laws, as well as their statuses as to non-judicial, anti-deficiency foreclosures. In the meantime, I will just keep adding notes. * Legal Disclaimer: This list...
tugbbs.com
From my understanding, his interpretation of Florida timeshare law (which you can read for yourself in the above TUG post) was that a Florida resort/HOA/developer, if an owner doesn't pay what's owed, can only seek to foreclose via a non-judicial proceeding (without any judge being involved). Since a judge is not involved who might make a determination that you still owe such-and-such money, there would not and could not be a deficiency judgment. There would never arise any means by which the resort could get back a penny.
But that's only if you don't object in any way. If you say "What the F are you talking about? I only owe $20,000 and not the $20,100 you claim I owe", I would think that's an objection. If you simply say, "I object", that's an objection. If you say, "You crooks lied your behinds off and fraudulently sold me a piece of horse dung for tens of thousands of dollars. I'm going to sue you" that's an objection. So don't object so that they can't play the "Gotya!" game and immediately run to a court because "obviously" a judge will have to render a decision.
As Dioxide points out, perhaps there might be a hit to your credit. After you'd be safely out of your timeshare and they'd have no further recourse against you, I'd write explanations for each of my credit companies' records if you did get such a hit. Everybody/most people knows/know what a timeshare is and I believe (but I don't know for sure) that nobody would hold it against you if you chose to default.
That being said, how might you prevent any possibility of a credit hit? It seems to me that Florida timeshare law puts you in an extraordinarily powerful negotiating position. By contacting the collectors of the timeshare debt, and letting
them know that
you know that all they can get is the "property" back, you might suggest that they take back the deed without paying for the non-judicial foreclosure route. And see what they say. Maybe there's not much work or time involved in a non-judicial foreclosure, but I bet there's even less work and time involved in simply accepting back your deed. And since that would be a mutually agreed upon transaction, I can't see how that would lead to any negative credit report implications.
One "bad" thing that may result from your getting out of your timeshare is that the act of forgiving your debt might result in some amount of "taxable income" that you'd have to report on your income tax. Again, I'm not an accountant or tax attorney but that's something you might reasonably expect.
So...the last thing I would recommend is not to 100% rely upon information you get from any Internet source. If it were me, I would seek out a Florida attorney and perhaps get at least a telephone consultation (hopefully free). And ask him or her if the above is the current state of Florida law. And also could it make a difference if they creatively structured the loan so that it was not truly a "timeshare" loan but some other type of loan.
