How to Get Out of a Timeshare That Has a Mortgage Attached

A timeshare that once seemed like a fun, money-saving vacation opportunity can morph into an unwanted burden if you get in over your head financially or just don't have time to enjoy it. You can't just stop paying without facing credit consequences. If there is a mortgage attached to the timeshare, the majority of states allow lenders to pursue a deficiency judgment if you default. A judgment is enforceable using a variety of methods, including wage garnishment and levying bank accounts. If you want to get the timeshare off your hands, there are a few legal options you can pursue.

If you feel the sales representative or developer misrepresented the facts or failed to disclose key information that would have kept you from making the purchase, you might have a case. Contact an attorney specializing in timeshares or contract law to review your contract and evaluate your situation. You might be a victim of unfair and deceptive practices. The attorney can assist with a timeshare cancellation, termination, settlement or modification. Only retain a licensed attorney. Steer clear of companies claiming to be timeshare cancellation experts. Many fraudulent companies charge up-front fees for unrealistic guarantees.

Although your resort might not advertise it, some offer deed back programs that are similar to a deed in lieu of foreclosure on a home. In this program, the resort might let you sign over the deed and relinquish your interest. If your mortgage is through a lender, you'll need to contact the lender to discuss the possibility of a deed in lieu of foreclosure. Typically, you'll need to prove you've suffered extenuating circumstances that hinder your ability to pay. Factors that impact the lender's willingness to accept a deed in lieu might include your payment history, amount remaining on the loan and resort desirability. The process is completed by signing over a quitclaim deed.

You can hire a real estate agent to sell your timeshare, but you'll have to pay listing and commission fees. However, it's possible to bypass the middleman and sell it yourself. Network with friends and co-workers to spread the word about your available timeshare. Advertise on free timeshare resale websites and forums, such as the Timeshare Users Group and Redweek.com. Ask to advertise on the bulletin board at your resort or in the newsletter. List your timeshare on auction sites, including eBay. If you timeshare is not selling, consider renting it out in the meantime.

If you've run out of options, you can file bankruptcy to wipe out the mortgage obligation. In Chapter 7 bankruptcy, your assets are liquidated to pay off your debt. By surrendering the timeshare, you eliminate the mortgage. Immediately after filing a bankruptcy petition, the lender must stop all collection activity. Chapter 7 bankruptcy has severe credit consequences that can last up to 10 years. Before filing bankruptcy, meet with an attorney to discuss how it will affect you.