Deedback - Affect on Credit?

terpsfan82 · May 18, 2016

All -

I've been offered a deedback on a timeshare (SPM). I have no balance on the property, but I have not paid any annual dues/fees in over 5 years. I just have to pay a fraction of the balance that is currently in collections, and I will be allowed to deed it back to the resort owner. Two questions:

1) What affect (if any) will the deedback have on my credit? I would hope none, since there are no outstanding loan balances but just overdue fees. I would also hope that they don't go out of their way to report this to the credit bureaus.

2) Will I be sent a 1099 or similar so the resort can write off the unpaid fees?

Thanks in advance

-terpsfan82

Ty1on · May 19, 2016

terpsfan82 said:
All -

I've been offered a deedback on a timeshare (SPM). I have no balance on the property, but I have not paid any annual dues/fees in over 5 years. I just have to pay a fraction of the balance that is currently in collections, and I will be allowed to deed it back to the resort owner. Two questions:

1) What affect (if any) will the deedback have on my credit? I would hope none, since there are no outstanding loan balances but just overdue fees. I would also hope that they don't go out of their way to report this to the credit bureaus.

2) Will I be sent a 1099 or similar so the resort can write off the unpaid fees?

Thanks in advance

-terpsfan82

I don't think you'll get a 1099 because you didn't have a loan. I believe this will be recorded in your credit history as "settled for less than owed." They aren't doing you a favor, btw. They are getting something from you instead of nothing, and they are saving themselves the legal costs of foreclosing your deed.

bogey21 · May 19, 2016

I think you can negotiate that the Resort will not report anything regarding the settlement to the Credit Reporting Agencies. I'm fuzzy on this but I think the Resort may have an obligation to report to the IRS via a 1099 the difference between the amount you gave them and the amount owed.

George

PS I did 5 Deedbacks at 5 different Resorts where everything was current and nothing ever showed up on my Credit Reports.

Bill4728 · May 19, 2016

bogey21 said:
PS I did 5 Deedbacks at 5 different Resorts where everything was current and nothing ever showed up on my Credit Reports.

Note IF YOU ARE CURRENT there should be nothing on your credit report if you do a "deed back"

You may have a hit on your credit score if you owe money.

TUGBrian · May 19, 2016

I would think that any negative hit on your credit would have already been applied if you are 5 years delinquent in maint fees.

Saintsfanfl · May 19, 2016

A 1099-C for debt forgiveness is only for financial institutions. A resort or HOA is not one of the entity types that would file a 1099-C.

You say the fees are in collections so I would think they are already on your credit report. Have you checked? They should not hit the credit report a second time but unfortunately if they are on the credit report and a payment is applied it is going to reset the clock for when it drops off.

Deedback - Affect on Credit?

terpsfan82

Ty1on

bogey21

Bill4728

TUGBrian

Saintsfanfl