Timeshare - Thread jack

[rockstache]

MC posted a question about getting out of a timeshare and I have more questions about that but didn't want to thread jack. My in-laws just finished paying off a time share ($30K), and now have the maintenance fees (I think around $850 per year) to pay forever.  I guess my question is, what sort of credit problems will we have if we end up defaulting on the maintenance fees? I am so nervous/upset about the whole situation that I it makes my stomach hurt. Anyone see any good options here?

[jrhampt]

No, but I am curious to hear people's ideas.  My parents have a timeshare which they can't afford (they are seriously broke and I have no idea what they were thinking) and which they plan to leave to the children eventually.  I would prefer to help them get rid of it while they are alive, honestly.

[dragoncar]

Well have you read the document in question?  The answers usually start there (deed, lease, whatever was signed)

[rockstache]

Yes I have read it. My question is not really whether or not we are responsible (I see that we will be), but in what way it will affect us.

[adam]

What company is it with?

You know you can re-sell timeshares. 

[MsSindy]

It truly is a deed of real property, just like your house.  If his name is on it, he will be responsible for it.  If the siblings decide to default on their share, his name will be on it and he'll be responsible.  I would quickly have him remove his name.

My story:
My mother bought a timeshare back in the 80s.  When she passed in 2001, I was the only one that had any interest in it (damn sentimental reasoning!), so we agreed that we would just deed it to me and I'd pay the maintenance fees and get use out of it.  Well, now I really want to get rid of the thing, because I don't live anywhere near it and so I have to exchange it through RCI (another membership fee) and they charge me an additional $200 to use the exchange!  So, I'm in for close to $1,000 in fees per year - Anyone want a FREE timeshare at Havasu Dunes in Arizona??!!  I'm dead serious.  I am willing to deed it over to anyone who will have some use for it... hell, I'll even pay 2013 dues.

[adam]

Found this somewhere online:

The process varies by developer and association so this is a general response only. Also, the process can vary tremendously if the ownership is a non-deeded membership as compared to a deeded ownership interest. The info below is normally related to deeded timeshares.

Normally, when your maintenance fee payment is late- you will receive a notice of non-payment in the mail. This will add a late fee and interest rate to the amount due and provide you with a new due date.

If this new invoice is not paid, the next notice will normally be a "lock out" notification, which informs you that until your financial account is brought current you will not be able to access your vacation ownership interval or points. This letter will also normally give you a final due date, and inform you that if not paid by that deadline the account will be given to a third-party collection agent (a few resorts will use their own internal collectors).

When the debt collector receives the file, they will send you a notice of their intent to collect. It is at this time that the consumer has the ability to contest the debt, or to request written proof that the debt is actually owed. Once the debt is confirmed or accepted, the collection agent will call to try and arrange a payment collection schedule. If you don't pay, then the unpaid debt will normally be submitted to the various credit reporting agencies at this time.

The collection agent will continue to pursue payment with routine letters and calls. It's important to note here that as long as the collector is a third-party agency, they must follow the Fair Debt Collection Act practices. You can find info on the FDCPA at Debt Collection FAQs: A Guide for Consumers. If the collection agent is an employee of the company owed the debt, they normally DO NOT have to follow those guidelines.

Often, when an owner falls behind two years in fees- the developer or association will either authorize the collector to offer a deed in lieu, or will begin a foreclosure process. Again- policies and procedures vary widely and there are multiple variables that are often considered such as the likelihood of the resort being able to collect on a judgement if it is awarded by the judge..

For the consumer, it is important to understand that a deeded timeshare foreclosure normally impacts the personal credit rating of the individual in exactly the same way as a home foreclosure, so it can have a long term impact even after the collection calls stop!

It is always recommended that a timeshare owner attempt to resolve the issue with their resort in some manner that does not end up as a foreclosure. It is much better for the consumer, as well as the association to negotiate a settlement. If your resort management company threatens you with foreclosure, always consult with a local attorney to ensure you properly understand the possible consequences that may impact you, both short term and long term.

(The new laws allowing non-judicial foreclosure in some states may have changed the traditional processes as well. Perhaps a member who is on their resort's board of directors can help shed some light if things have changed for their property.)

Also saw something regarding donating the timeshare mentioned on a Dave Ramsey page.  It will cost you to get rid of it in that case.

[dragoncar]

Yes I have read it. My question is not really whether or not we are responsible (I see that we will be), but in what way it will affect us.

Well you asked about your options, which will depend on the specific covenants agreed to.  The rest of us have no idea what terms you are under.

[rockstache]

Thanks Adam, that is really helpful.

[rockstache]

Yes I have read it. My question is not really whether or not we are responsible (I see that we will be), but in what way it will affect us.

Well you asked about your options, which will depend on the specific covenants agreed to.  The rest of us have no idea what terms you are under.

My husband signed a 1/2 page document that said that he understood that he would be responsible for the maintenance fees going forward. There was no other information on that document. I am sure that there is a primary contract somewhere, but I haven't seen it and don't know what/where it is. I am just trying to find out general information about how much of a hit you can take from a timeshare. I have given you everything I know.