Timeshare Foreclosures and Your Credit Score
If you have exhausted all of your other options for getting rid of your timeshare including selling on the web, auctions sites like eBay and Craigslist, donation to charity, and giving it away, a timeshare foreclosure may be your only option. The time share foreclosure process is somewhat similar to a home foreclosure, in that eventually the property will eventually be returned to the lender and sold at a sheriff’s auction to the highest bidder. Being armed with information, and knowing how this process can affect you and your future purchasing/lending power is a key part of a successful foreclosure. This post will help to prepare you for what may lie ahead, and provide information regarding credit score changes you may experience as a result of a timeshare foreclosure.
How the foreclosure is executed:
When you signed the contract for your timeshare, you signed a promissory note for the lender to assure them that you would be paying the money back, with interest. When your timeshare forecloses, the lender will obtain possession of the property and sell it at auction. Sheriff sales, like the one your timeshare property will go through when it is auctioned off after foreclosure, are matters of public record. A foreclosure itself is a legal action which is handled by the court system, which is again, public record. All of the major credit agencies – Experian, Equifax, and Transunion – monitor, report, and base their credit scores on information contained in court public records.
How much will a timeshare foreclosure affect my credit score?
A foreclosure, and similarly a deed in lieu of foreclosure, will affect your credit score between 230-280 points, depending on the reporting credit company. This point deduction of 230-280 points, and negative mark on your credit score, will stay on your credit report for anywhere from 7-10 years, and companies will be able to purge this information upon closer inspection after the 10 year period has elapsed.
I am not positive if short sales are done in timesharing, but a short sale will affect a homeowner’s credit score from 80-120 points, and will be present on the credit score for a period of at least 7 years following the short sale.
Be aware that not all timeshare companies will report missed, late, or foreclosure account notifications to credit agencies, but this does not mean your foreclosure will never get reported. There are many instances where timeshare owners do not notice any blemish on their credit score during the foreclosure process, but just because your lender/timeshare company is not reporting the actions, does not necessarily mean you will never take a hit to your credit.
September 29th, 2008 at 9:36 am
After auction if the sale does not payoff my balance can the timeshare company come after me the deficient balance? If so, how liable am I to pay the balance off and how does the deficient balance affect my credit?
December 13th, 2008 at 8:40 am
If the time-share is paid off and only maintanence fee are required. Will halting payment of those fees influence credit score?
May 1st, 2009 at 9:53 am
I have the same question as Rex – I own my timeshare with no mortgage. Does turning in the deed in lieu of paying the maintenance fees affect my credit score?
May 8th, 2009 at 11:37 am
To answer your question a quote from the above article, – “A foreclosure, and similarly a deed in lieu of foreclosure, will affect your credit score between 230-280 points, depending on the reporting credit company. This point deduction of 230-280 points, and negative mark on your credit score, will stay on your credit report for anywhere from 7-10 years, and companies will be able to purge this information upon closer inspection after the 10 year period has elapsed.”
Is this actually going to happen? Probably not. The reason being that it is much easier and profitable for the company that owns your timeshare/whom you owe money, to use high-pressure sales to move forward with selling more timeshares than it is for them to chase you down and challenge you in court.
See the following article for more information – “What Happens if I Stop Paying my Timeshare?
June 30th, 2009 at 11:51 am
[...] If your timeshare does go all the way through the foreclosure proceedings you will be notified by mail that your deeded timeshare will be part of a trustee’s sale or public auction. At the given date, time and place your timeshare will be sold at a sheriff’s auction to the highest bidder. The auction is public record and the transaction can be recorded and reported to the IRS and credit bureaus, effectively ruining your credit for the next 7 years. This strike on your credit score can make it difficult to finance a car, obtain a loan or even buy a home. Since timeshares rarely sell at auction for the amount owed on the deed, the timeshare resort company has the option to take legal action and sue you for the remaining balance owed. Read more on timeshare foreclosure and credit scores in the post – Timeshare Foreclosures and Your Credit Score [...]
June 30th, 2009 at 3:43 pm
I foolishly purchased a timeshare at Tahiti Village. Consolidated Resorts which managed the property and sold the shares is now in bankruptcy. I probably will never ever have to borrow money so I can take the hit on my credit score. If I allow the unit to forclose, I lose about $5000 of a sixteen thousand dollar purchase. If I pay a transfer fee of $3000 after I pay off the $11000 I still owe, there is a company that will relieve me of the share but I lose $19000. A real estate agent tells me I can sell the share for approximately $2000 and her fee will be $1500. I still would have to pay off the share losing $16000. Why is the forclosure reported to the IRS. Is it income to me? After all, they won’t get more than I owe. They could sue me for the remaining amount. Then I would not only own nothing but I would have a judgement against me which someone will have to pay eventually. The hit on my credit last 7 to 10 years. What about the judgement. Will it affect my estate. Do I need a lawyer to sort this out?
July 8th, 2009 at 7:47 am
What if the timeshare is a membership not a deed and is fully paid off and current? Will it still affect my credit score if I stop paying the maintenance fees?
July 24th, 2009 at 7:42 am
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July 28th, 2009 at 10:32 am
Purchased a timeshare at Consolidated resorts Tahiti Village, Las Vegas Nevada 4 months ago, monthly pay is around $430/mo + annual maintenance fee, transfer fee, taxes, etc.
Had the same experience as others before the sale: told we can refinance mortgage thru other lenders (found none yet), that they were financially sound and stable, expansion of facilities ongoing…(what now? – they’re in bankruptcy), have our own title (non yet), etc.
I How do I get out of this mess and what are my chances? Do I need to see legal counsel, and/or join a class civil action group? I am out of work now and don’t want my hard earned money go to a futile or wrong investment. I think I can handle a blow on my credit score (excellent rating for now).
I am contemplating on stopping my monthly payments. Is this a wise move?
July 28th, 2009 at 1:17 pm
We are going through the same thing with Tahiti Village. We have tried to resell the property and refinance. Nothing is working. We really don’t know what to do at this point. I am considering seeing a lawyer right now on how to handle this. Them going through bankruptcy makes me rethink all of our decisions.
July 29th, 2009 at 1:35 pm
I own a timeshare at Club Calas in Puerto Rico. After attempts to donate the timeshare to charity failed, I stopped paying maintenance fees several years ago. A collection agency is now in contact with me trying to collect $6000 in back fees (and very high late fees). I am telling them to go pound sand. What may happen next?
August 10th, 2009 at 6:29 am
We are in the same boat as the rest of you– only solution I have found is a realtor in Florida found on the TUB.Com website who can sell it and takes a commission at the sale. They are the only legitimate agency to sell your timeshare. Any of the hundred of advertising agencies who want an upfront fee to advertise–beware they are all scams. This is such a fraudulous industry– I have written to President Obama–timeshare sales need to be stopped.
August 11th, 2009 at 9:26 am
We are having the same problem with Lake Tahoe Resort. In seven years, we have never been able to get in to use ours, even trying to book a year in advance! I agree with Sue. EVERYONE should begin writing to their legislators and President Obama and tell their stories. TIMESHARE SALES AND CONTRACTS AS THEY ARE NOW CONDUCTED NEED TO BE STOPPED!
September 12th, 2009 at 10:13 am
What I never see addressed is what can you do about “inheriting” a timeshare from a relative thas has passed away? My mom left me with this “white elephant” and now I am responsible for all the maintenance/special assessment fees??? I can’t afford to pay these fees. Is there any help for people in my position?
September 28th, 2009 at 4:47 am
I agree with Sue about writing the president,etc. I have a timeshare at Mystic Dunes in Kissimee which is now in foreclosure. A year ago when times started getting hard and my employer put me on part-time work I asked for advise on what they could do to help. The answer was nothing. When I lost my job and asked again the answer was nothing. I attempted to sell it no luck. When my husband and I divorced and I once again asked for help the answer was nothing. So now I have to deal with this foreclosure and there is nothing I can do about it as I can no longer afford the timeshare. Paying the bills to keep a roof over my kids head is more important than the timeshare. And they do not take into consideration the $20,000.00 I have already paid into it. SUCH A SCAM!!!
September 30th, 2009 at 10:05 am
What happens if a timeshare salesman gives false information during a sale? Would I be able to cancel without the hit on my credit?
October 20th, 2009 at 8:26 am
I am in the same boat. We purchased from Tahitti Villiage in Las Vegas who are now in bankrupcy. Can anyone give advice on what to do?
November 3rd, 2009 at 1:15 pm
If a salesperson gives false information, the best thing to do is to report that sales person to your state’s Department of Real Estate right away.
December 1st, 2009 at 4:47 pm
I also bought timeshare from ASNY company, Tahiti Village,Las Vegas. If you read thoroughly the contract, you will realize, everything is to our disadvantage. Someone is looking for a lawyer for class action suit againts tahiti village sellers..they use different names. You can email to tahiti.village.lawsuit@gmail.com for updates.
Also, Write the FEDERAL TRADE COMMISSION AND PRESIDENT OBAMA> IF HE WILL NOTICE US EVERYBODY SHOULD WRITE SO HE WILL ACT ON IT AND HAVE IT INVESTIDATED> IT Will be history for him and his achievement stopping this timeshare thing.
December 2nd, 2009 at 7:08 pm
My timeshare loan is about to go in to default and my timeshare company emailed me that they are going to proceed in a Legal Judgement against me. If I don’t contact them to accept one of the payment options they have available they will start to garnish my wages. Can they do that? Shouldn’t it just go into forclosure?
January 7th, 2010 at 9:34 am
My timeshare is a deeded property and the mortgage is paid off; however, assessments & maintenance fees have caused Sheraton Vistana to put a claim for lien against it, the 1st step in the foreclosure process. What effect will this have on my credit score?
June 23rd, 2010 at 10:39 pm
Why hasn’t anyone anwswered december 2nd 2009 soup says?? Can they garnish our wages?? What if we barely make enough to survive on our wages as it is?
June 23rd, 2010 at 10:41 pm
Why hasn’t anyone answered december 2nd 2009 soup says?? Can they garnish our wages?? What if we barely make enough money to survive as it is? How can they be so cruel in today’s economy?
June 23rd, 2010 at 10:42 pm
Why hasn’t anyone answered december 2nd 2009 soup says?? Can they garnish our wages?? What if we barely make enough money to survive as it is? How can they be so cruel in today’s economy? Please answer.
June 24th, 2010 at 5:46 am
yam,
there will be no garnish to happen, it will be put in court for judgement in order to foreclose, Time Share loan is secured by the timeshare itself it can only be foreclosed and suffer 5-7 yr credit hit, which can be regained again.
June 27th, 2010 at 3:43 pm
Thank you for responding Rose. I hope you are correct. The agent in the collections dept. at Wyndham timeshare told me the bank that holds the loan can garnish my wages, and/or put a lien on my house. I wasn’t sure if she was just trying to scare me with lies or not. Since their salespeople are such liars I figured she may also be one.
June 30th, 2010 at 6:43 am
My husband and I went to the sales gimic at Tanglewood Resorts in Potsboro, TX 14 years ago. We signed papers and thought we bought a timeshare. We only received the papers at signing, and never heard from them again until 7 years later, they called and told us that our papers had fallen between the files in the file cabinet and our contract had never been processed. They told us we could pay all the back fees and they would process it then. We said, no, we didn’t want it and since they lost our file for 7 years, they had no right to proceed. They then turned us in to the company that collects the assessment fees. We got that straightened out when we proved that we didn’t own any property in Grayson county because the contract had never been processed and we had never paid one payment on that time share. Now, 14 years later, we get contacted by a collection agency saying we owe 800 dollars because we had made a downpayment on that time share 14 years ago. How can they do this? Is there no statue of limitations to them trying to rape us? They are the ones that screwed up by losing the papers for 7 years.
June 30th, 2010 at 10:41 am
My husband and I bought @ Tahiti Village in 2007, and the salesman said it would be no problem to refinance the loan, and “ha ha, if you don’t refinance we’ll name a phase after you for the amount you’ll end up paying.” We have tried refinancing, Consolidated won’t even refinance, nor will the agency who bought the loans. Anyone had any luck having them take the contract back?