[2009] Why Do We Shame People Out Of Walking Away?

[bnoble]

If giving up that payment and defaulting on it allows them to otherwise stay afloat and pay the rest of their debt obligations, then overall, that is better for the economy than going by the "moralists" advice on this board that you should only default on your ts if you are going to let everything go downhill and file for bankruptcy.

I suspect that there are very few people for whom timeshare payments, even if they include payments on a purchase loan, are the sole difference between solvency and insolvency. For those who are in deeper than just the timeshare, and are truly insolvent---lost your job, got hit with huge medical bills without adequate insurance, etc.---then bankruptcy is probably the right solution. It will take years to build back creditworthiness, and will involve other sacrifices, but that's the price one pays for bankruptcy.

For those who aren't that deep, but just feeling the pinch, then there are almost certainly other places to cut back to make it up. Those cuts will be sacrifices---cutting the cable, losing the cell phone, turning down the heat, eating cheap, etc.---but they won't involve damage to one's credit profile. Alternatively, picking up an extra job on the side could make the difference.

If the payments are just MFs, and you own the interval free and clear, then there are ways to get rid of the ongoing burden without damging your credit profile---they may net cost you something out of pocket, but not huge amounts of money, and those costs will be repaid in a year or two in most cases. If you just want out of paying MFs down the road, you can get there, and TUG can help you.

If the payments are a loan on a timeshare purchase, then you are almost certainly stuck with it until you either discharge the loan or default. But, you signed the papers, so put on your big boy pants and suck it up. I'm one of those people who thinks it is foolish to ever finance a discretionary lifestyle purchase, even if you have the cash flow to cover the payments. You never know what tomorrow will bring, and that cash flow can dry up at any time, and then you are stuck. There are a handful of exceptions---if you have liquid assets that are earning more than the loan costs (on an after-tax basis), it can make sense. If trouble arises, you can use those liquid assets to zero out the loan. But, such situations are rare.

If you can't pay cash for a timeshare, you shouldn't be buying it. I'm horribly old-fashioned this way, and probably in a distinct minority here. But, in my book, if you took out a loan to buy a timeshare, you deserve whatever you get. That's not "nice", and it's not a popular sentiment here on TUG, where it's never our fault that we got hoodwinked by that nasty salesman, but so be it.

 

[rickandcindy23]

I can't believe how seriously some people take this stuff.

This is a casual conversation about something none of us can control, except in our own resorts. I doubt any of us is going to be on the bandwagon for developers to stop building, but it would help all of us, should that happen. Maybe resales would be worth something more than 0-25% of retail (25% being the top resorts).

 

[ace2000]

I suspect that there are very few people for whom timeshare payments, even if they include payments on a purchase loan, are the sole difference between solvency and insolvency. For those who are in deeper than just the timeshare, and are truly insolvent---lost your job, got hit with huge medical bills without adequate insurance, etc.---then bankruptcy is probably the right solution. It will take years to build back creditworthiness, and will involve other sacrifices, but that's the price one pays for bankruptcy.

There's a condescending attitude that takes place in the answers to those asking for help. I think that's what the OP is talking about. I'll agree with your statement above IF you know the answer to your questions with certainty, when providing your advice to people requesting it. However, unfortunately none of us know the answers to your questions, when they come around TUG for advice and assistance.

And many of the TUG 'experts' are more concerned about the rising cost of their own maintenance fees than actually assisting someone who might be in a real bind. How do I know? Because they've admitted to it.

And then how many of these 'experts' would continue paying on their house if the value decreased by 50%, or have owned a business that went bankrupt, or any of the other scenarios mentioned above? Or how many have close family members in the same boat?

All I'm saying is that it's so easy to appear pure on the internet. Regardless, this whole issue is going to play out one way or another over the next 5 years, and it'll be interesting to see how it plays out.



.

 

[rickandcindy23]

And then how many of these 'experts' would continue paying on their house if the value decreased by 50%, or have owned a business that went bankrupt, or any of the other scenarios mentioned above. Or how many have close family members in the same boat?

I would continue to pay for a house that decreased in value by 50%, because I wouldn't have less than 20% in equity to begin with. Our house has lost > 30% of its value over the last 3 years, ironically because of all of the people walking away.

We have family members who are filing bankruptcy, but they still go on their vacations, and that is something I don't get.

 

[PerryM]

There's a condescending attitude that takes place in the answers to those asking for help. I think that's what the OP is talking about. I'll agree with your statement above IF you know the answer to your questions with certainty, when providing your advice to people requesting it. However, unfortunately none of us know the answers to your questions, when they come around TUG for advice and assistance.

And many of the TUG 'experts' are more concerned about the rising cost of their own maintenance fees than actually assisting someone who might be in a real bind. How do I know? Because they've admitted to it.

And then how many of these 'experts' would continue paying on their house if the value decreased by 50%, or have owned a business that went bankrupt, or any of the other scenarios mentioned above? Or how many have close family members in the same boat?

All I'm saying is that it's so easy to appear pure on the internet. Regardless, this whole issue is going to play out one way or another over the next 5 years, and it'll be interesting to see how it plays out.



.

Asking for help is admitting you've made some bad decisions and want others to reward those bad decisions.

Rewarding bad behavior and punishing good behavior seems to be what America has gotten itself into - this will not last....

 

[John Cummings]

And then how many of these 'experts' would continue paying on their house if the value decreased by 50%, or have owned a business that went bankrupt, or any of the other scenarios mentioned above? Or how many have close family members in the same boat?

All I'm saying is that it's so easy to appear pure on the internet. Regardless, this whole issue is going to play out one way or another over the next 5 years, and it'll be interesting to see how it plays out.



.

My home has decreased in value by 70% and it is upside down, but I have NO intention to stop paying for it.

 

[ace2000]

Asking for help is admitting you've made some bad decisions and want others to reward those bad decisions.

Rewarding bad behavior and punishing good behavior seems to be what America has gotten itself into - this will not last....

I kind of like the idea of helping others without any prejudices, pre-conceived notions, and judgemental attitudes... but I can understand why you would have your point of view.

 

[bnoble]

I'll agree with your statement above IF you know the answer to your questions with certainty, when providing your advice to people requesting it. However, unfortunately none of us know the answers to your questions, when they come around TUG for advice and assistance.

I don't think you need to know the answers with certainty as long as you lay out the options, because almost no one fits the situation where walking away from the timeshare (and only the timeshare) is the best solution. You *could* just walk away---but that option has consequences. For almost everyone who asks the question, either they are "feeling the pinch", and a few small sacrifices in other areas will avoid those consequences entirely, or they are fully and truly insolvent, in which case abandoning the timeshare alone will not solve their problems, and they may as well file and get it over with.

If we're talking about MFs, the chances that MFs alone are the straw breaking the camel's back are small indeed. Even in expensive locations, it's not much worse than $120/month or so. Heck, I own three, and my total MF+tax burden comes to $175/month. Drop your cable or satellite TV until you can unload the thing, and you're more than halfway there.

If someone really has cut back discretionary expenses first, fine, we can talk---but I'm going to bet that most who come here to ask "the question" haven't done that and aren't willing to. If we're talking about loan payments, well, as I wrote above, I don't have much sympathy. This might be viewed as condescending. I don't care.

And then how many of these 'experts' would continue paying on their house if the value decreased by 50%

You keep coming back to this. I don't know why.

If you don't need to sell, and you can still afford the payments, being underwater doesn't matter. The total costs of just going into foreclosure (and paying more interest for loans down the road---if you can get them) are likely to be outweighed by the "gain" you get from walking away---especially if, in the alternative, you can ride it out until there is some recovery in value. I suppose if you assume that housing prices will *never* recover, the answer is different. But, I don't think most people believe that's our future.

If you do need to sell, then you either need to file or convince your lender to accept a short sale. If neither of those things are palatable, then find a way to not have to sell.

Now, it's true that a timeshare is never going to recover that 50% loss of value. But as I think I've made plain, I don't see any rational reason why anyone would finance such a purchase in the first place---even if they had no idea that the value would collapse the day the rescind period ends. Financing lifestyle is a fool's errand, and if you do it, you're liable to learn an expensive lesson.

 

[PerryM]

I kind of like the idea of helping others without any prejudices, pre-conceived notions, and judgemental attitudes... but I can understand why you would have your point of view.

Charity has a place - folks are free to donate their time and money if they wish; after all it's still a free country (I guess).

Tough love is hard to do.....

 

[Karen G]

Asking for help is admitting you've made some bad decisions and want others to reward those bad decisions.

I agree with the first part of that sentence, but not the last part. I think asking for help when you realize you've made a bad decision is the first step in avoiding making another bad decision. But I don't think it always is looking for people to reward or approve of a bad decision.

TUG is all about sharing information and help for anyone who comes here asking for it. You can't change the past, but you can change what happens next.

 

[Rob&Carol Q]

Financing lifestyle is a fool's errand, and if you do it, you're liable to learn an expensive lesson.

ooh -ooh ... I learned this lesson 15 years ago at Wydham Kingsgate

Do I get a cookie? :hysterical:

Y'all needed to laugh and lighten up a bit....

 

[PerryM]

How good are you at playing Whac-A-Mole?

I agree with the first part of that sentence, but not the last part. I think asking for help when you realize you've made a bad decision is the first step in avoiding making another bad decision. But I don't think it always is looking for people to reward or approve of a bad decision.

TUG is all about sharing information and help for anyone who comes here asking for it. You can't change the past, but you can change what happens next.

Folks who make bad decisions make a bunch of them - which one do you reward? And why?

Better to demand that they honor their commitments and let them figure out how to keep their word - this will help them address all the other bad decisions that are just waiting to burst forward.

Trying to fix someone's bad decisions is like playing the game Whac-a-mole - it never ends folks....

 

[AwayWeGo]

Nothing Personal. It's Just Business.

I kind of like the idea of helping others without any prejudices, pre-conceived notions, and judgemental attitudes.

Yeh. Maybe.

The trouble is, when unconditional help is readily available regardless of circumstances, then right away plenty of people -- too many people -- start taking unfair advantage.

Or, as my old army CO used to put it, give'm an inch & they'll stick it up your nose.

Then after that, the people who make sacrifices so they can live up to their obligations regardless of reverses of fortune & despite tough times generally will start to feel like chumps. Before long, they'll start jumping onto the bailout bandwagon too. And under those circumstances, why shouldn't they ?

Once it becomes generally accepted that promising to repay loans, etc., does not necessarily mean that those promises will actually be kept, then what bank or financial institution in its right mind will be willing to put its money & its customers' money at risk by making loans that may or may not be repaid ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[rickandcindy23]

I kind of like the idea of helping others without any prejudices, pre-conceived notions, and judgemental attitudes... but I can understand why you would have your point of view.

I don't think we should reward people for making bad choices. How are you personally helping others with their bad choices?

Our philosphy at Twin Rivers and Val Chatelle (I am on the board at both) is always to take back weeks when owners no longer want or can afford their timeshare weeks, but it has its price, and other owners are angry about it, to be honest. I know why.

 

[Karen G]

Folks who make bad decisions make a bunch of them - which one do you reward? And why?

Better to demand that they honor their commitments and let them figure out how to keep their word - this will help them address all the other bad decisions that are just waiting to burst forward.

I'm not talking about rewarding bad behavior. I agree with you about honoring commitments. I'm talking about the kind of help Dave Ramsey gives in helping people get out of debt.

 

[bnoble]

Asking for help is admitting you've made some bad decisions and want others to reward those bad decisions.

Asking for help is admitting you've made some bad decisions. But, we all do that, and it doesn't *necessarily* mean that you want others to reward those decisions. It could be that you want advice about the least costly way to accept responsibility for those bad decisions. For some people, the least costly way is to file. For others, it is to cut back on discretionary purchases while you make amends. For a very very few, abandonment will be the least costly way. But, no matter what, there are costs, even for abandonment.

Here's an example of what I'm talking about: we had a car that ended up at negative resale value---the costs of repairs were worth more than the car. I called a salvage guy who came and got it. I signed over the title, pulled the plate, and got $50 cash, but didn't manage to get a receipt. The salvage guy ended up (presumably) selling it to someone else, who then abandoned it in a nearby city. But no one filed a transferred title or registered the car, so the city in question came after me for disposal fees.

Naturally, I wanted to stick it to the salvage operator. One of the benefits I pay for through my employer is some simple legal coverage. We called one of the plan laywers asking what our options were. The upshot: he could send a letter to the salvage company about breach of contract, and it might get somewhere, but without evidence of the transaction we'd probably end up paying anyway, plus penalties as it dragged on. So, we paid up, closing teh book and spending a couple hundred bucks learning an important but not too expensive lesson: always ALWAYS get it in writing.

Was the salvage guy ultimately a crook? Yes. Does that matter? No. Because I didn't have the transaction in writing, I was still on the hook to pay the disposal fees, so that's what I did. I could have stomped my feet and held my breath and said "But I'm right so I'm not going to pay!" But eventually, I'd have to pay. The only question was when, and how much.

 

[ace2000]

And then how many of these 'experts' would continue paying on their house if the value decreased by 50%, or have owned a business that went bankrupt, or any of the other scenarios mentioned above? Or how many have close family members in the same boat?

You keep coming back to this. I don't know why.

Let me be more clearer... there are many hypocrites in this world (and also on this thread). I have no idea who they are individually, but they're here...

You've chosen just one of my examples. Here's another...

If anyone on here is willing to set up a business and would have no problem jettisoning their debt when the business goes under, is just as low a person as someone jettisoning their timeshare.

 

[bnoble]

Do I get a cookie?

Yes, and you get one "free" with every purchase of at least 77K annual points at full retail value! :whoopie:

 

[rickandcindy23]

We all dislike developers and their games (I personally think they are evil), so that is where we can all agree. A timeshare is not a necessity!

I do feel empathy for those who have purchased timeshares from the developers and regret it later. But they made a mistake and must honor the commitment they made, or as Alan said so eloquently:

Once it becomes generally accepted that promising to repay loans, etc., does not necessarily mean that those promises will actually be kept, then what bank or financial institution in its right mind will be willing to put its money & its customers' money at risk by making loans that may or may not be repaid ?

 

[e.bram]

not where FRAUD is involved.

 

[rickandcindy23]

not where FRAUD is involved.

Every developer purchase is fraud, in my opinion. The fact that the salespeople lie is perpetuating a contract that is fraudulent. So we agree! Odd for us.

But a buyer has the internet and can easily find resales at any resort, and if they buy a timeshare and don't look it up, then they are truly stuck. We bought two weeks from developers, so we know how awful it can be. If you could go back in a time machine and change things, that would be the ideal. But no one has invented one yet.

 

[PerryM]

Playing by the rules....

I'm not talking about rewarding bad behavior. I agree with you about honoring commitments. I'm talking about the kind of help Dave Ramsey gives in helping people get out of debt.

Sorry, missed that.

There are all kinds of help available for folks who are in trouble - of course folks can play by the rules and use any techniques, and laws that are available to them.

Encouraging folks to live up to their obligations and play by the rules is what I'm advocating. If that means relief is obtained by them then I'm all for that.

 

[AwayWeGo]

Eloquence & Empathy Are Both Overrated.

I do feel empathy for those who have purchased timeshares from the developers and regret it later. But they made a mistake and must honor the commitment they made, or as Alan said so eloquently:

. . .

Shux, the really eloquent part was what my old army CO said.

However that may be, the people who buy full-freight timeshares from the timeshare companies aren't exactly making informed decisions. Typically, they get fast-talked into buying. The timeshare sellers pressure them to buy now-now-now.

Why the big rush ?

Easy.

Got to get the customers to sign on the line fast so that the customers will not have any opportunity to smarten themselves up.

Got to speed up the sale to preserve the unequal distribution of market information that works exclusively to the timeshare company's benefit.

Can't let folks out of the sales room without buying, because once they're gone the timeshare sellers know they're never coming back.

Taking unfair advantage of buyer ignorance is the foundation of the timeshare companies' biz plan, & it's that lamentable fact that inspires whatever empathy I might feel for those who were hornswoggled & bamboozled into paying full freight for timeshares & came to regret it later when they discover how badly they've been had.

Because hardly any full-freight timeshare buyers ever enter into it with their eyes wide open, there's surely nothing wrong with empathy for those who have been taken advantage of. The most practical way to express empathy, however, is by trying to equalize that 1-sided distribution of market information -- i.e., by supporting TUG & participating in TUG-BBS to help get the word out so that fewer people will be taken in by the timeshare sellers' razzle-dazzle & ballyhoo.

Knowledge Is Power.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[PerryM]

I get a kick....

Let me be more clearer... there are many hypocrites in this world (and also on this thread). I have no idea who they are individually, but they're here...

You've chosen just one of my examples. Here's another...

If anyone on here is willing to set up a business and would have no problem jettisoning their debt when the business goes under, is just as low a person as someone jettisoning their timeshare.

I strongly disagree with that statement.

Using the Federal Bankruptcy Laws is perfectly legal and ethical.

Walking away from obligations which you have profited from (like going on vacation) is unethical and against laws. There are all kinds of alternatives - just because a person is lazy and walks away doesn't mean we should feel sorry for them and help them.

With all the help available on the internet there is no reason under the sun to feel sorry for someone who just abandons their timeshare. This is the kind of person that needs a good kick in the pants....

 

[ace2000]

I strongly disagree with that statement.

Using the Federal Bankruptcy Laws is perfectly legal and ethical.

Walking away from obligations which you have profited from (like going on vacation) is unethical and against laws. There are all kinds of alternatives - just because a person is lazy and walks away doesn't mean we should feel sorry for them and help them.

With all the help available on the internet there is no reason under the sun to feel sorry for someone who just abandons their timeshare. This is the kind of person that needs a good kick in the pants....

Using the Federal Bankruptcy Laws for personal reasons is perfectly legal and ethical also, according to your point. I'm going to have to assume that then.

I don't think a person has to labeled 'lazy' for walking away from their timeshare, or their personal, or their business debt. There can always be unknown or unforeseen cirumstances.

Regardless, of whether someone is walking away from their business debt, their timeshare debt, or their personal debt... they are all at the same level of being a 'low-life' (your terminology here, my point is they are all at the same level).

Nobody is feeling sorry for anyone. In my belief, you are being condescending and patronizing using that type of terminology. Did anyone feel sorry for Donald Trump when he announced he was going BK?