Advice on how to eliminate my timeshare

[csxjohn]

http://www.nolo.com/legal-encyclopedia/can-mortgage-company-garnish-wages-after-foreclosure.html

http://www.reuters.com/article/2014/10/14/usa-housing-foreclosures-idUSL2N0S906920141014

See above.

After reading these two articles it seem to me that bankruptcy might be the best way out but as the first one points out, talk to a lawyer. It may be just "a measly TS property" but it's still $16,000 you owe.

 

[VacationForever]

After reading these two articles it seem to me that bankruptcy might be the best way out but as the first one points out, talk to a lawyer. It may be just "a measly TS property" but it's still $16,000 you owe.

Filing bankruptcy does not work when you are not bankrupt and has the means to pay. OP may simply have to keep paying off his obligations. It is fascinating to read about no-recourse state which makes me wonder if CA is a non-recourse state.

 

[uscav8r]

Yes, just a blip on credit scores. No garnishments, no collections, nothing. This guy I know (ex-ex neighbor) bought another home with cash in the same development prior to packing up and then letting his home foreclosed on. He makes good living too... One would think that the mortgage company will go after his other home. Not so much. A friend of mine just walked away from her home, rented another place and live life as normal. The list can go on..

At the very least it DID affect their credit. That has snowball effects for several years that, while not be as harsh as wage garnishment, still impose a pain point. They essentially bypassed the collection timelines and had an immediate resolution and associated 7-year bruise that will deter future lenders from providing them with the best rates. That is nothing to be sneezed at.

 

[uscav8r]

Filing bankruptcy does not work when you are not bankrupt and has the means to pay. OP may simply have to keep paying off his obligations. It is fascinating to read about no-recourse state which makes me wonder if CA is a non-recourse state.

http://www.financialsamurai.com/non-recourse-states-walk-away-from-mortgage/

Apparently CA is non-recourse. But that does not mean BK is the best course!

Note that this article talks about FHA loan eligibility 2 years after BK. Before anyone thinks that sounds like a fantastic deal, consider that the best FHA APRs are already at least 1.25-2% higher than a conventional loan. Then roll in a credit problem. One could be paying 3-4% higher APR with a bad credit score than with a good one.

For a $200k home loan, a 3.5% rate has a payment of about $900/mo for Principle and Interest. At 6.5%, that same mortgage PI is $1265, or $365 more per month.

That's $4400 per year living in the home. For as long as you live in the home (up to 30 years). Even if you only live in the home for 10 years, that is $44k! It would be even worse as the home's sale price increases.

Now paying off that $16k loan balance doesn't seem so bad.

 

[taterhed]

Such cynicism and pessimism here geez... but understandably so I guess, from veterans who know a thing or two about how these things work. Like I originally said in the first post months ago, I am green behind the ears at this stuff, have NEVER dealt with this before. The offer to purchase a TS sounded great, amazing, wonderful, I got suckered into it, some time passes and I regret buying it in the first place. HUGE ripoff is an understatement. But y'all have heard this story a million times before on these pages, I'm sure. This site looks legit with many members with all kinds of experience, tips and advice. This is why I'm here trying to get advice on what the BEST possible solution is given my current situation so cut me some slack. And by now, yes I have acknowledged that there is no "easy" way out based on the responses.

At the time of purchase I got the super-ultra-mega-deluxe platinum package. I'm hoping I can talk to them to "downgrade" (?) and have them keep all the difference in money if that means my monthly financial bleeding can stop going to them.

If, I have to work two jobs, so be it, I was living at my moms place the past few months and it'll be worth it if I have to not go back there lol. As usual, any and all advice is welcome on how to best move forward.

Geez, I was really trying to stay out of this, but.....

Your statement above seems humble and honest enough:

1. Make an appointment TODAY to speak to a free/low cost credit counselor. Not the kind that want to sell you something, just the kind that will give you good confidential advice. I'm sure someone will pop up with suggestions. Look for local/state based groups--most national companies are businesses making loans.
2. $16K is peanuts. The cost of a bankruptcy is very high in many ways. Care to venture what a BK lawyer costs per hour? How about that choice job offer in 10 years that has question 16. "Have you ever declared bankrupcy...." Ouch.
3. Give up now, you'll be giving up the rest of your life (you sound young). You made a mistake. Work to mitigate it, not run from it. Marriage is harder than a timeshare debt..

Finally, I'm glad you're asking for help and advice. It's the right thing to do. Of course, many of the people on this board are not going to pat you on the back for taking on debt and then handing it to the HOA (whose bills are paid by the people writing these messages). I'm guessing you don't like the attitudes and unkind words you're hearing here... Guess what? If you take the easy road here, people will be judging you and giving you sh** for the rest of your life. Some will be more forgiving, others not.



My advice? Get professional advice first, try to correct your mistake with hard work, brains and persistence (with the TS/Finance company) and learn from this mistake.


Honestly, I wish you the best of luck. Don't let this define your life.

 

[VacationForever]

http://www.financialsamurai.com/non-recourse-states-walk-away-from-mortgage/

Apparently CA is non-recourse. But that does not mean BK is the best course!

Note that this article talks about FHA loan eligibility 2 years after BK. Before anyone thinks that sounds like a fantastic deal, consider that the best FHA APRs are already at least 1.25-2% higher than a conventional loan. Then roll in a credit problem. One could be paying 3-4% higher APR with a bad credit score than with a good one.

For a $200k home loan, a 3.5% rate has a payment of about $900/mo for Principle and Interest. At 6.5%, that same mortgage PI is $1265, or $365 more per month.

That's $4400 per year living in the home. For as long as you live in the home (up to 30 years). Even if you only live in the home for 10 years, that is $44k! It would be even worse as the home's sale price increases.

Now paying off that $16k loan balance doesn't seem so bad.

In other words if OP lives in one of the 12 states, other than taking a credit history hit there really is no other consequence. I have been told by several sources that while it remains on the credit history, it really only affects FICO score for 2 years. Don't hold me to my words but you can google it. I rented my home to someone who walked away from a loan and I was told by my realtor that I could be assured that he would be renting from me for 2 years as he could only buy another place after 2 years when his FICO score recovered. It is CA and one of the non-recourse states. This is another guy/family who makes fantastic living and chose to walk away from his obligations. I don't like it but such is the law.

Having said this, i wonder if a timeshare resides in a recourse state and buyer/owner lives in a non-recourse state does it mean that the loan holder can seek recourse? ... and vice versa...That will need to be answered by an attorney.

 

[cm_mc]

Thanks for the advice, taterhed. I will be speaking to a lawyer through legal zoom about what my best course would be as well as a credit counselor. But it sounds like I will have to find a way to pay this off :/

 

[Passepartout]

Thanks for the advice, taterhed. I will be speaking to a lawyer through legal zoom about what my best course would be as well as a credit counselor. But it sounds like I will have to find a way to pay this off :/

NOW you're using your head for something besides a hatrack.

Jim

 

[jpc763]

Thanks for the advice, taterhed. I will be speaking to a lawyer through legal zoom about what my best course would be as well as a credit counselor. But it sounds like I will have to find a way to pay this off :/

Well many of us here bought developer timeshares. I did. I paid WAY more than they are worth, but I get 2 weeks a year in a 5 star resort with my family and friends. These memories will never go away and that cost that I incurred years ago is gone as well.

Pay it off, learn to use it, create long term memories for yourself, family and friends. Those are priceless.

 

[e.bram]

OP:
You have been swindled! Maybe a local law school's legal clinic can help you for free to give their students some experience under the guidance of a law professor.
My wife(at age 50) helped people in this way when she was going to law schoo
If you do get sued, some county courts will help pro se litigants.

 

[Passepartout]

OP:
You have been swindled! Maybe a local law school's legal clinic can help you for free to give their students some experience under the guidance of a law professor.

If you do get sued, some county courts will help pro se litigants.

Baloney! The OP simply signed a timeshare contract freely (with the usual amount of sales pressure), and didn't read the contract while within the rescission period. Subsequently found out it was not such a great deal and unilaterally decided not to pay for it.

No law school is going to take on such a case, nor will any court appoint a litigant in a civil case against a deadbeat. The OP has admitted that he is solvent, can afford the TS, has taken on an expensive apartment, and just doesn't WANT to pay his obligation.

 

[comicbookman]

Baloney! The OP simply signed a timeshare contract freely (with the usual amount of sales pressure), and didn't read the contract while within the rescission period. Subsequently found out it was not such a great deal and unilaterally decided not to pay for it.

No law school is going to take on such a case, nor will any court appoint a litigant in a civil case against a deadbeat. The OP has admitted that he is solvent, can afford the TS, has taken on an expensive apartment, and just doesn't WANT to pay his obligation.

What he said

 

[e.bram]

Let him ask for a jury trial and let the jury of his peers sort it out.

 

[Passepartout]

Let him ask for a jury trial and let the jury of his peers sort it out.

You're dreaming. This would be the world's shortest jury trial. Verdict: Pay up. Now.

 

[e.bram]

Passepartout:
I always go to court. If you lose ,the worst case scenario it is no worst than paying up. HOWEVER. You can win(sometime I do) or settle which means it cost you less.
We are not talking criminal or PI cases here. For the amount involved the plaintiff is not using Clearance Darrow.


ps. Of course things might be different in Idahoe(the boonies from my point of view)

 

[comicbookman]

Passepartout:
I always go to court. If you lose ,the worst case scenario it is no worst than paying up. HOWEVER. You can win(sometime I do) or settle which means it cost you less.
We are not talking criminal or PI cases here. For the amount involved the plaintiff is not using Clearance Darrow.

And that is called abuse of the legal system, and just mucks things up for the rest of us. Also, they could be countersued for costs, with the TS company correctly pointing out the frivolous nature of the suit. All it takes is one annoyed judge and he might also get stuck with the court costs as well, if the Judge decides that he wasted the courts, and especially the jury's time.

Also, it is less likely to be tolerated in the big a city than the "boonies" A big city court is going to be less tolerant of having their time wasted by people who don't think they should have to keep their word, or deal with their mistakes.

 

[Passepartout]

Of course things might be different in Idahoe(the boonies from my point of view)

Which goes to show your level of misinformation. Good job.

 

[e.bram]

comicbookman:
Our courts are geared to providing protection to the the consumer, rather than businesses.
If using my Constitutional Rights(see 7th amendment) as I am an AMERICAN CITIZEN is abuse , so be it.
ps. Look at the Manhattan Club NY litigation
You would think that a judge in the "boonies" would relish these cases, gives them something to do.

 

[e.bram]

comicbookman:
Our courts and laws are out to protect consumer from being swindled, tricked and snookered.

 

[comicbookman]

comicbookman:
Our courts are geared to providing protection to the the consumer, rather than businesses.
If using my Constitutional Rights(see 7th amendment) as I am an AMERICAN CITIZEN is abuse , so be it.
ps. Look at the Manhattan Club NY litigation
You would think that a judge in the "boonies" would relish these cases, gives them something to do.

The Manhattan club was playing games and not living up to their contractual obligations. Here it is the potential plaintiff that wants to not abide by the contract he willingly signed. The 7th amendment gives you the right to a jury trial for a legitimate dispute. It in no way gives you the right to waste the courts time. Here you have someone who is perfectly capable of living up to their obligation, they just no longer feel like it (similar to what the Manhattan club did). Constitutional rights do not give American citizens the right to impair other citizens rights. That is what would be happening by making a jury sit through a bogus case suit, such as this would be. The rights of 6 to 12 AMERICAN CITIZENS usually outweighs the rights of one American citizen. It's called a balancing act. Just like your right to free speech does not allow you to yell FIRE in a crowded theater (when there is no fire) because the possible harm caused to many out ways your right to free speech. I would suggest you take a course on constitutional law and perhaps civics.

 

[Jason245]

e.bram :

I don't mean to put a downer on your civics class, but:

Most if not all modern contracts with consumers now have provisions in place where people sign away their rights to trials in favor of Arbitration (with cost split defined in the contract).

Also, while it is true that you have the right to a trial, you DO NOT have the right to equal resources for that trial. You also DO NOT have a right to reimbursment for your full legal costs should you win the case.

Given that this would generally not fall under a small claims court case, the hiring of an attorney, initial filing, serving of papers, and whatnot could run several thousand dollars. Attorneys generally charge more if the case goes to trial (and don't forget all the costs to defend against the counter claim).

The worst case scenario is ending the trial with the $16K debt (Plus late fees and interest), tens of thousands of dollars in legal fees, and potential damages and/or legal fees from the other side. Ultimatly, assuming you don't have enough to cover that, you are looking at bankrutcy.

I have known people that have had lawsuites over $100k that went on for 3 years and ended with winning the $100k, but only getting $20k towards the $200k in legal fees needed to win the case (The other side spent something like $350-500k on their own legal fees). Sometimes long drawn out moral victories are more costly than they are worth.

 

[e.bram]

comicbookman:
Selling someone real estate(or anything) for $16,000.00 that is immediately worth less than $0.00(a liability) by a person representing themselves as an expert(licensed in case of Real Estate)in that commodity is fraud and "fraud in the inducement", regardless what the contract states. Let the legal system judge or jury sort it out. I don't think that is abuse of process.

 

[DeniseM]

e.bram - What is your personal experience with winning a lawsuit against a timeshare developer? The details would be very helpful to others in the same situation.

 

[e.bram]

Jason:
I think this(not a complex case) could be done pro se or with pro bono help from a local legal clinic.

 

[Jason245]

comicbookman:
Selling someone real estate(or anything) for $16,000.00 that is immediately worth less than $0.00(a liability) by a person representing themselves as an expert(licensed in case of Real Estate)in that commodity is fraud and "fraud in the inducement", regardless what the contract states. Let the legal system judge or jury sort it out. I don't think that is abuse of process.

The timeshare is not worthless. The Developer can show that people are buying them for 16k and more every single day. Just because the owner is unable to sell it for that much on their own isn't the fault of the developer.