Timeshare Deed in Lieu
Timeshare Foreclosure – What Is A Deed In Lieu Of Foreclosure?
When people buy their timeshare they have all intention of paying for it and keeping it for a long time. Their financial situation is typically strong at the time they make the purchase. However, things may change as time moves forward and it’s not uncommon for timeshare owners to be left with a timeshare they can no longer afford to use or afford to keep paying for. When this happens, there are certain ways and means to get out of the deal with as little damage caused as possible, with one common option being that of the deed in lieu of foreclosure.
If in any instance an owner falls so far behind on payments that it is 100% impossible for them to catch up, the timeshare may be at risk of timeshare foreclosure. As such, the timeshare company may introduce the option of a deed in lieu of timeshare foreclosure as an avenue more preferable to that of a standard foreclosure.
Roughly summed up, a deed in lieu of timeshare foreclosure basically refers to the deal struck between the timeshare owner and the property developer whereby the property is effectively given back to the developer and therefore becomes the developer’s property once again. The developer will allow the owner to deed back their timeshare instead of the timeshare developer filing a timeshare foreclosure on the property. If accepted by the owner they sign the deed back to the developer and that ends their ownership. The debt on the timeshare loan is forgiven and you don’t have to be concerned with legal ramifications from the timeshare company.
Another problem that accompanies these kinds of agreements is that it may also leave a negative mark on the individual’s credit report, which in turn may make it more difficult to successfully apply for financial loans in the future. This is of course up to the actual developer and those handling the debt, so it’s important to discuss the matter with them prior to agreeing to anything. If you aren’t sure of any of the options or the impact any course of action may have on your credit report, you must speak to a third party prior to agreeing to any deal – ideally a lawyer with experience in the field.
What’s important to remember is that each timeshare developer handles delinquent owners different than the next developer. Some developers charge a fee for the deed in lieu of timeshare foreclosure process; some developers want to see your personal information such as bank statements, paystubs and monthly expenses; some developers issue a 1099c which means the amount of the debt that they forgive will be income to you when you go to do your taxes for that year. This is precisely why the involvement of a third-party expert is important as there is no general rule by which all such developers operate and therefore nothing should be assumed. The goal is to get you released with the least amount of damage and a timeshare attorney understands this and knows what steps to take to achieve this.
Find help getting rid of your timeshare here.