Stuck with a TIMESHARE. Advice how to get out? It’s messing with ER numbers

[drumstring]

I can’t believe we fell for it a number of years ago. It was an emotional purchase and we’re stuck for about $20k plus the annual fees. At least it’s with Hilton which is a good company, but usually they don’t have good timeshare availability when and where I need to travel for work. This means I can only use it for recreation. And, even that - it seems like I can’t get reservations where and when I want. Not happy with the service, but stuck with no apparent way out.
The main thing is the $344 out every month. I met with a timeshare exit company but they seemed just as criminal as the timeshare itself.

Does anyone have advice how to get out legally?

 

[Sunset]

You are correct (IMHO) that timeshare exit companies are there to steal your money.
The key tipoff is they want a fee up front instead of getting paid after the sale like a real estate agent.

If you plan a year out in advance that can make it easier to get your TS when you want to holiday, it does take planning.

You will probably take a loss on it. A BIG LOSS, if you can even sell it.

The $344/month, surely that is not the annual fee, but includes the purchase ?
If so what is the interest rate ?

 

[Sunset]

If you have not been to the site: https://tug2.net/ Timeshare Users Group. Now would be a good time.

You can browse it for free, and joining for $15/yr gives you some benefits, I found it useful.

 

[SecondCor521]

I don't think any TS company could be called good.

My Dad bought one and sold it back to the company for about 1/3 of a penny on the dollar about four months later.

I agree with your assessment about time share exit companies, even ones with good reputations. My state's real estate commission people also think that time share exit companies are, uh, less than honorable businesses. This also seemed to be the general consensus at TUG when I looked there.

In my research, I did not have any luck with finding any good legal ways out of the contract. Conceivably we could have sued them to take it back based on false advertising or fraud, but those were not slam dunk arguments and so my Dad decided not to pay a bunch of legal fees for a possible exit - he wanted certainty.

I also did not find any options by complaining against the timeshare company with the Attorney General, the BBB, or any other government entity or watchdog group. They will gladly take a complaint and put it in a pile with the zillion others they have, but they won't actually take any action against any TS company as far as I could see. (The closest was my state attorney general's office of unfair business practices, and they only expressed mild interest.)

You can try to sell it on TUG or similar, but my impression is that your TS is no different from the other zillion TSes on those marketplaces. Any that sell, typically sell for $1.

The other thing I considered was just telling my Dad to stop paying. Eventually I figured the TS company would get mad and cranky and maybe even sic a collections company on my Dad. Unfortunately, they would be mean to my Dad, and they'd probably persuade him somehow to pay even more money to buy back in - they're very persuasive that way and I'd read lots of horror stories of people going in to cancel and coming out owning 2 weeks instead of one. And I wasn't sure my then-83-year-old Dad would be able to or want to put up with the hassle and pressure and confusing tactics they would likely use.

But if you were younger and had your wits fully about you and were 100% sure you wouldn't fall for their tactics - and were OK trashing your credit - then it's an option.

HTH. Good luck.

 

[VanWinkle]

Unfortunately, timeshares are like Variable Annuities, they are sold based on emotions and almost never bought without a free dinner involved. The best advice I can give is "Don't do it". I wish I had a way out for you, but the contract makes an exit difficult without a large penalty.

 

[erkevin]

I owned a deeded timeshare for 25 years. Obviously, it was paid off- it was just the fees that made it a burden. The yearly maintenance fees became more than what I could rent a condo for on AirBnB. Tried to sell it, give it away. no luck for years. I finally went back to the owner (to deed back). they said no. I then told them I was going to walk away from it and they would have to foreclose; costing them a ton of money and time. We swung a deal whereas I pre-paid several years of maintenance fees and they took it back. It cost me $2500, but I am completely free of it.

 

[clobber]

You can try to sell it on TUG or similar, but my impression is that your TS is no different from the other zillion TSes on those marketplaces. Any that sell, typically sell for $1.

Never owned a TS, but this might be acceptable. You "lose" the 20K but recognize the bad investment. You get out of the $344/mo (OUCH!).

 

[Rianne]

I owned a deeded timeshare for 25 years. Obviously, it was paid off- it was just the fees that made it a burden. The yearly maintenance fees became more than what I could rent a condo for on AirBnB. Tried to sell it, give it away. no luck for years. I finally went back to the owner (to deed back). they said no. I then told them I was going to walk away from it and they would have to foreclose; costing them a ton of money and time. We swung a deal whereas I pre-paid several years of maintenance fees and they took it back. It cost me $2500, but I am completely free of it.

I will share this with my DB. He owns 3 timeshares and they've been great over the years. He'd get us a week, we'd pay one of his yearly maintenance fees. We got one in Punta Ala, Italy one year...amazing. I think he wants to get rid of one or two of them.

 

[JP.mpls]

My sister went on a Florida vacation about two years ago, and came back with a timeshare that she can not afford.


I think she signed the contract with her daughter, so they are both tied to this damn TS.


I'm assuming after some attempt to get out of it by dealing directly with the company, my niece talked to a lawyer. She has decided to stop paying the monthly payment, and deal with having her credit trashed.



This is very disappointing news to me, because I've been hoping this niece and her husband have been saving to purchase their first home.



My sister has now decided to stop paying the monthly TS payment. I hope it works out for them. I have no idea what the results will be.


My sister just turned 65, and she might be retiring now, because of her work situation. She was hoping to work one more year.



A question:
Can the TS company go after her SS and small pension, or are these incomes protected? She needs every penny she can get in retirement just to live. She has little savings, and no home.



Take care, JP

 

[erkevin]

In some states, defaulting on a timeshare loan is not reported to the credit agencies.

 

[Vacation4us]

I own three Marriott timeshares bought cheap resale. I love them but when I no longer want them I will give them away on Tug2.net mentioned above.

OP your Hilton May have some value but not nearly what you payed and impossible to get rid of if you still owe money.

Don’t use an exit company. They will take your money and do nothing for you.

Your options are;
1. Keep paying and learn to use what you own.

2. Pay off your loan and attempt to sell or give away your timeshare

3. Stop paying and walk away. There are some states with an “anti deficiency “ law that may mean you can walk away without legal responsibility

Good luck and do visit TUG ( timeshares users group ) collectively the group are free experts

 

[Sunset]

I owned a deeded timeshare for 25 years. Obviously, it was paid off- it was just the fees that made it a burden. The yearly maintenance fees became more than what I could rent a condo for on AirBnB. Tried to sell it, give it away. no luck for years. I finally went back to the owner (to deed back). they said no. I then told them I was going to walk away from it and they would have to foreclose; costing them a ton of money and time. We swung a deal whereas I pre-paid several years of maintenance fees and they took it back. It cost me $2500, but I am completely free of it.

I had a deeded timeshare, which fortunately I bought on e-bay for $1,500.
We enjoyed it for many years, and it did force us to take a vacation.
Twice in the time we owned it, the TS company offered me an extra deeded week FREE of charge, I was tempted but didn't bite.

After we tired of it, I learned how hard it was to get rid of a TS, and finally in desperation I phoned the TS company.
They took it back with only a payment of $250 for the legal fees. I thought that was generous of them, and counted myself lucky.

 

[nvestysly]

Hello drumstring, Welcome to e-r.org

I can't offer anything more helpful than already posted regarding the sale of a timeshare. As others have said, they seem to be an anchor around your neck and difficult to sell or even give away.

However, I have another thought - sort of a making lemonade out of lemons scenario... You're almost certainly going to take a loss when you do finally sell or give the TS away. That loss can be applied to your income taxes (I think) and help with offsetting any gains you might have. The most simple way to handle the gains and offsetting loss would be to incur both in the same year so it's easy to keep track. However, losses can be carried over from year to year so the gains could occur in a different tax year if that works out better for your situation.

If you are able to avail yourself of this approach it would still be some pretty sour lemonade, but at least it may help.

Best wishes.

 

[SecondCor521]

Hello drumstring, Welcome to e-r.org

I can't offer anything more helpful than already posted regarding the sale of a timeshare. As others have said, they seem to be an anchor around your neck and difficult to sell or even give away.

However, I have another thought - sort of a making lemonade out of lemons scenario... You're almost certainly going to take a loss when you do finally sell or give the TS away. That loss can be applied to your income taxes (I think) and help with offsetting any gains you might have. The most simple way to handle the gains and offsetting loss would be to incur both in the same year so it's easy to keep track. However, losses can be carried over from year to year so the gains could occur in a different tax year if that works out better for your situation.

If you are able to avail yourself of this approach it would still be some pretty sour lemonade, but at least it may help.

Best wishes.

I sincerely doubt this.

TS are considered a piece of real estate that you own a fraction of. I believe capital losses can only be taken on your primary residence, not secondary residences. It would be hard to make the case that your TS is your primary residence.

 

[nvestysly]

I sincerely doubt this.

TS are considered a piece of real estate that you own a fraction of. I believe capital losses can only be taken on your primary residence, not secondary residences. It would be hard to make the case that your TS is your primary residence.

A quick internet search indicates losses on a personal use timeshare are not deductible. The loss has to be reported but it's not offset in any manner by gains or vice-versa. Similarly, if a timeshare is sold with a gain, the gain is not taxed but it must be reported. I'm probably in way over my head here.

If a timeshare has been used for rental and accounted for as such with all the proper cost basis, etc. then the losses can be deducted, perhaps on a pro-rata manner. Regardless, the law seems to be based on the fact that timeshares are personal use property - similar to an automobile, boat, RV, etc.

It's now my (new) understanding is that timeshares are not considered as real estate in the normal sense.

 

[HI Bill]

Wow! I always thought that timeshares were a bad financial decision, but I had no idea that they are this hard to unload. I never wanted to be tied down to one location for my vacations, so I never bit.

 

[Sunset]

Wow! I always thought that timeshares were a bad financial decision, but I had no idea that they are this hard to unload. I never wanted to be tied down to one location for my vacations, so I never bit.

They are worse than this, unsuspecting children can inherit a TS, and be stuck paying the annual fee for the rest of their lives.

Most folks need to tell their children, to refuse inheritance of the TS.

I have no idea if TS can go after the estate for perpetual annual fees

 

[SecondCor521]

They are worse than this, unsuspecting children can inherit a TS, and be stuck paying the annual fee for the rest of their lives.

Most folks need to tell their children, to refuse inheritance of the TS.

I have no idea if TS can go after the estate for perpetual annual fees

There was language in my Dad's TS contract that essentially tried to enforce the inheritance of the TS on his kids, even to the point where if all of his heirs tried to disclaim it that they would go after the executor personally somehow to force the inheritance onto someone. Truly ugly and scary stuff.

 

[SecondCor521]

A quick internet search

Were any of those search results from irs.gov? If so, I'd be interested in reading them for my own education and edification. Thanks.

I should clarify that my previous comment about TS being fractionally owned real estate was based on my recollection of my Dad's TS contract and my related notes. TS contracts can and do differ, so maybe in some cases and jurisdictions they are considered personal property. I should have made my statement more specific rather than general.

 

[Lakewood90712]

O.P. needs a Time Machine, to go back and say no.

 

[youbet]

O.P. needs a Time Machine, to go back and say no.

I can't begin to tell ya how much better off I'd be today if I had one of those, on a whole pile of issues!!

 

[erkevin]

I will say in my timeshare's defense, my family has had 25 years of amazing vacations in great places; Hawaii, Cancun, Puerto Vallarta, Orlando, St. Maarten, Palm Springs, Cabo, New Orleans, San Carlos, and many more. I got rid of it because many of those locales have AirBnBs for less money. I did do a financial review of the total ts costs vs number of vacation weeks; it came out to about $800/week over the 25 years.

 

[jimnjana]

Another option is trading them in to a resort. Friends traded an RCI timeshare into palace resorts. They got three or four weeks free and now never have to go back. Palace resorts are all inclusive they sell membership like a timeshare less the annual maintenance fees. You only pay if you go back. They won't trade all timeshares some do not allow corporate ownership like Westgate. Cons you gotta pay to go on vacation to get rid of it, depending on the value/what you paid for it you might have to pay something extra to join palace/pros at least you get something for the money you will likely pay to rid yourself of the TS.

 

[njhowie]

Wow! I always thought that timeshares were a bad financial decision, but I had no idea that they are this hard to unload. I never wanted to be tied down to one location for my vacations, so I never bit.

Not all timeshares are bad.

We purchased our Disney timeshare almost 20 years ago, have used it extensively year after year, and could sell it today for double what we paid.

However, the benefits and savings are great so we'll keep it. This past year, we rented half our points which paid for our annual maintenance, and still had the other half for our own use. We'll likely continue this going forward, since there is also a very robust rental market for Disney.

 

[drumstring]

Thanks!

Wow!
Thanks everyone for your responses!
For all the bad news about my options, at least I got the opportunity to hear from so many of you thoughtful folks!
At this time when everyone has had to stay away from each other, you’re reaching out warned my heart.

I feel like something should be done to change the way TS companies can just abuse people for decades and generations. I guess I’m just stuck so I will go forward and try to make the most of the forced vacations. I guess I wouldn’t mind it so much if I actually felt the service was good. The lack of availability is what chafes the most. If I were paying for services that match the cost it would be far more palatable.

It’s also very helpful to confirm NOT to use a TS exit company and to get things in order to try to save my son from inheriting an albatross when the time comes.
Thanks again!