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My Husband is Ill. How Do We Get Out of This Timeshare? – Dorthella

“Dear Steve,

We have $30,000 in credit card debt. we are current and are making payments on all of them that will pay them off in 3 years. I have one credit card that I charge gas & groceries and pay off in full each month.

We have a timeshare with Shell Vacation in California, it is a points system but is deeded property, so it is considered real estate. We have a mortgage of 11,500. We cannot afford the monthly mortgage and maintenace payment of $367. My husband’s health has deteriorated and we cannot use the timeshare points. We cannot transfer it because there is a mortgage. We cannot sell it. We have decided to let this go to foreclosure, which will ruin our credit rating. We have no assets. We are not homeowners.

If we go ahead with foreclosure, can they garnish our bank accounts? We have retirement, social security, and my self-employment income. We recently moved to Florida. This is a California debt. We still have our bank accounts in California. Would moving them to Florida give us any protection? We are leasing a car. At the end of the 3-year lease, we would like to buy a car. We realize our interest rate may be higher, but can we get financing? If we decide to move from our present condo, will someone else rent to us if we have a timeshare foreclosure on our records? Is it likely that the CC companies may close our accounts? If there was a medical emergency, we may need to use a credit card.

Dorthella”

Dear Dorthella,

I hate to be the bearer of bad news but a timeshare is a noose around your financial neck. While the mortgage company may foreclose for non-payment that’s not the big problem, it’s the monthly fees. A foreclosure will not kill those fees if the lender does not take the property back.

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Timeshares today are worthless. Timeshare companies won’t take them back, they have no resale value and it is highly unlikely you will be able to break free from that obligation without a legal intervention in your finances.

Frankly the most expedient way to severe your obligation to the mortgage and monthly payments for the timeshare is probably going to be with bankruptcy. For the sounds of it you might qualify for a Chapter 7 bankruptcy and in just a few months you can break free of that noose around your neck.

Immediately following the bankruptcy you can begin to rebuild your credit and the bankruptcy would be able to stop payments to your other creditors and allow you to save those payments in a savings account to use as an emergency fund.

I wish I had some better news on the timeshare but it is what it is.

You can click here to find a local bankruptcy attorney and if you’d like a second opinion about your situation or a personal consultation by another debt coach, please feel free to contact Damon Day.

Please post your responses and follow-up messages to me on this in the comments section below.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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