Timeshare Foreclosure: What Is a Deed Back, and What Is It Not?

A deed in lieu of foreclosure (or a deed back) is usually a desperate attempt to get rid of an unwanted timeshare. Although it’s always bad to lose a property in exchange for no money, it’s a good option to prevent further damage to your credit rating. Maintaining a good credit score should always be a priority, as it’s a big factor that lenders considered when you apply for loans to finance your business, your house, or even renovations.

A deed back is a great option, but before you execute a timeshare deed in lieu of foreclosure for less credit impact, realize that it’s not enough to simply understand what it is. It’s also imperative to know what it’s not. Below, financial experts share their knowledge about what a timeshare did in lieu of foreclosure is not:

It’s Not a Panacea

Yes, a timeshare deed can avert a potential credit-score reduction brought by foreclosure, but it might not let you get away scot-free if your mortgage lender or property developer reports it to the credit bureau. As with any remedy to avoid paying your debt, it can turn into lingering negative information on your record. Who wants anything negative on their record?

During the negotiation, you must be smart and ask the other party not to report it in writing. After all, the lender or timeshare company wouldn’t benefit whether it’s attached to your name or not. It only gives you leverage before the deed transfer is complete. So, you ought to use it to your advantage for as long as you can.

It’s Not a Guarantee


Most timeshare developers don’t accept a deed back from a delinquent owner. It’s only logical. Again, it’s your job to be convincing enough and show the other party that it’s a mutually beneficial move. The other party can find it as a welcome option to avoid wasting time and money on foreclosure. If you could successfully ask for an opportunity to bring your account current before a deed back, then it could work wonders for your situation.

It’s Not a Cost-Free Transaction

Nothing is every free, so don’t be misinformed in thinking that a timeshare deed in lieu of foreclosure is a free transaction. The other party might charge you an extra fee to do it. Regardless of the cost, it probably a small price to pay compared to the menacing impact of foreclosure on your credit rating. It’s really a matter of selecting the lesser of two evils.

Before making any rash decisions, it’s best to consult experts who can help you choose wisely and pragmatically. Like a lawyer, for instance. A qualified attorney would tell you that a deed in lieu of foreclosure isn’t the only way to dispose a bad timeshare. There are other measures you can take to get out of your current situation. Explore these options, do your research, and weigh the pros and the cons of each. Seeking legal advice is a smart deal to handle your situation properly.

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