Selling a timeshare

Most owners are ready to walk away after dealing with the frustrating process of trying to sell a timeshare. Some may have difficulty coming to terms with the loss they need to take in order to sell a timeshare. Most timeshares sell in the resale market for 50% or less than the original purchase price. Still motivated to sell your timeshare? Read through our resale category for advice on selling timeshares.

Donating a timeshare

Donating a timeshare may be your best opportunity to produce a positive outcome from a negative situation. Timeshare donations work on a simple concept: The donation company will purchase your timeshare at a bargain price, resell the timeshare, and give a portion of the profit to a charity. Still interested in donating a timeshare? Read our article on donating a timeshare.

Walking away

So what will happen if you simply stop paying the maintenance fees? Will it affect your credit? The answer to both is, it depends. The process for recovering unpaid maintenance fees and/or taxes on a deeded property can be much different than a right-to-use contract. Laws and regulations also vary depending on the location of the timeshare.

Given the many variables our best advice for anyone considering walking away from a timeshare is to contact a lawyer. A decent lawyer can review your contract and provide a suggested course of action. The thought of throwing more money at the problem may sound depressing however money spent on a lawyer would be a wise investment in the problem, and it may be more affordable than you think. The advice of a lawyer may help you avoid damaging your credit.

Your last option is to just stop paying the maintenance fees, taxes, special assessment fees, and collection fees. This approach will most likely result in damaged credit. Deeded timeshares will eventually result in a foreclosure, or a deed-in-lieu. A foreclosure will affect your credit, even if it was a deed-in-lieu. I am not aware of any laws or regulations that require a creditor to report a deed-in-lieu, and you may have some wiggle room to negotiate with the creditor how it is reported, but the success rate of this approach is limited to none. Make sure you understand your tax obligations when pursuing a deed-in-lieu or a short sale. In the US a creditor will write off the debt and the IRS will treat the forgiven debt as income. The creditor will send a 1099-c to both you and the IRS when they write off a debt.

If your timeshare is not a deeded ownership then you most likely own a right-to-use and/or points based timeshare. Walking away from a right-to-use timeshare contract is similar to walking away from a cell phone contract. There is no asset for the resort to recover due to unpaid fees however they can pursue the collection of unpaid fees that are defined in the terms of the contract. Your unpaid fees will most likely be sold to a collections agency. Collection agencies take pride in their ability to upset your daily life through phone calls to both you and relatives, threatening mail, and in some cases legal action.

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