Buying a timeshare is fun, but retaining ownership? Not so much.
With timeshares come mortgage payments and maintenance fees that can take a toll on your finances. If you’re unable to make these payments, you’re at risk of a timeshare foreclosure.
Let’s look at the negative impacts of timeshare foreclosures in detail.
Lower Credit Score
Perhaps the biggest disadvantage of a timeshare foreclosure is that it can lower your credit score. While many timeshare companies don’t report late payments or foreclosures to credit agencies, some use this as a way to keep timeshare owners from backing out of a deal. They may threaten to damage your credit score by reporting your missed payments if you plan on skipping the maintenance fees and terminating the contract.
If a foreclosure is reported or made public knowledge, your credit agency can access this information. As a result, your credit score can drop several points and affect your credit history. It can also impact your chances of securing future credit.
Chances of Tax Implications & Deficiency Judgment
While most lenders usually target the property, you may find yourself facing a deficiency judgment during a foreclosure. This is the money given to creditors when the loan they’d issued to debtors doesn’t cover the debt sum. Whether or not you face a deficiency judgment depends on the state law as well as your lender.
If you’re sent a cancelation form by the lender who decides to write off the debt, you’ll most likely have to include it in your taxable income. Thus, there are tax implications associated with timeshare foreclosures as well.
Some employers conduct thorough evaluations and screenings before hiring a candidate. If your financial record mentions a timeshare foreclosure, you may have trouble finding a good job. This is especially true if you’re targeting the finance industry or seeking a top-tier position at an organization.
Do you need legal advice on the timeshare foreclosures and cancelation? Contact The Law Offices of Mitchell Reed Sussman & Associates today. Our timeshare cancelation attorneys will guide you, help you file your claim, and secure an exit for you.
Reach out to our timeshare exit attorneys now.