Mortgage payments, maintenance fees, and assessments can add up if you own a timeshare. Not meeting your financial obligations can put you at risk of foreclosure. You could then lose the property, impose hardship on other owners, and disservice guests and those who you rent the property out to. It can also subject you to deficiency judgements and drop your credit score by as much as 100 points.
How Do Timeshares Work?
A timeshare is a shared property. Multiple owners have rights to use it; usually for a specified period during the year. Timeshare interests often apply to resort condominiums but can apply to hotel rooms, recreational vehicles, or houseboats. You may have a deeded interest, or actual share of ownership, or right-to-use interest, which is more like a lease rather than ownership.
If you purchase a 1/52 timeshare interest, you have access to the property for one week in a given year. The time period can be fixed, floating (divided up into different times of the year), or point-based in which you have access to different locations. Failing to make payments may lead to aggressive collection action, a judgement against you, or foreclosure.
What to Do If Facing Timeshare Foreclosure
The foreclosure process varies by state. It may be judicial or non-judicial. Our Los Angeles bankruptcy attorney can help with various options. While it can be difficult to get out of timeshare obligations, you can:
- Sell the property: Timeshares often have little resale value. However, you may make a profit if the location or resort is popular. The time period of your share can have an effect as well. Prepare to pay as much as 90% less. Offering to pay closing costs or not trying to recover maintenance fees for the year can improve your odds of a sale. You could essentially provide the buyer with a free week, which is a good incentive.
- Negotiate with the resort: If you are intent on keeping the timeshare, you can try negotiating with the resort or the lender. Perhaps they’ll be willing to reduce how much you owe or settle on a payment plan. Forbearance is also an option, in which you are exempt from making payments for a specified period of time.
- Give away your property: A giveaway may be your best option if the timeshare is off-season or in a less-than-favorable location. People have even tried listing their properties on Craigslist or eBay. Ask the buyer to pay the closing costs at first. If you don’t get any hits, try offering to pay them. As a last resort, you can try paying someone to take the timeshare, although timeshare resales companies can be quite expensive. An Orange County bankruptcy attorney may can help you make the right choices in this situation.
- Deed in lieu of foreclosure: You can also avoid foreclosure by agreeing to have the lender accept the deed of the property. The lender will then have the title. With a timeshare, a deed back is a voluntary handover of your title to the resort or property. However, you may need to convince someone a deed back is better than foreclosure, especially if you are behind in payments or delinquent on an assessment.
OakTree Law provides a range of bankruptcy, debt, and foreclosure services to help clients choose the right options. We can assist you in deciding what to do when facing a timeshare foreclosure. For a free evaluation, call 562-219-2979 or contact us online today.