Should I Let a Timeshare Go into Foreclosure?
Melanie and her husband bought a timeshare last year. They owe $20,000 on it and want to know if they can foreclose on a timeshare and how it would affect them.
QUESTION: Melanie in San Francisco and her husband bought a timeshare last year in Hawaii for $25,000. They owe $20,000 on it and want to know if they can foreclose on a timeshare and how it would affect them. Dave says even if they get foreclosed on, they're still going to be sued for $20,000 when all is said and done.
ANSWER: Selling it would be worth your time because after they foreclose, they're going to sue you for $20,000. It'd be worth your time to try to sell it for something because you're going to end up paying the difference. The best option that you've got is you can try to eBay it or put it on Craigslist—some people pull that off. They don't bring much that way—hardly anything because they really don't have any value. The option—and this is a very expensive timeshare you've got—is to go back to the salesperson. If they're still selling that unit for $25,000 and they make $1,000, offer them $2,000 to sell it for $15,000. You're basically bribing them, and then you're going to be $5,000 in the hole plus the $2,000 that you have to come up with. But I'd rather be $7,000 in the hole than sued for $20,000. You're probably going to have to borrow the money to cover that. That's going to be a better plan than just throwing them the keys and not paying it. They're going to come after you with guns blazing. You won't like the result of that.