DEAR BENNY: I don’t know if you can help me, but I don’t know where else to turn. About 10 years ago my husband and I were talked into buying a time share in Cabo San Lucas, Mexico. We paid cash and have always paid our maintenance fees. We have enjoyed our stays at this lovely resort. Last year my husband had some extensive medical problems and expenses and is no longer able to travel nor can he afford too. I wrote the resort and advised them we would return our one week time share back to them free of charge. My husband is 79 and I am 77, so flying across the country is no longer an option. We live in Maryland.
No one in our family can afford to take over the time share and companies claiming to sell it for us want large sums of upfront money. I don’t know which of these are trying to scam me or which ones might be legitimate. We have begun to receive debt collection threats and late fees for not paying the 2016 maintenance. I fear this company will attach our social security and small pensions.
Can you please advise? – Lois
DEAR LOIS: First, your social security cannot be attached or garnished by any private creditor. According to the Consumer Financial Protection Bureau (CFPB), “if a collector tries to garnish money in your account, the bank must look at your account history to see if you received any Social Security or VA benefits by direct deposit in the last two months. The bank must protect two months’ worth of benefits from garnishment and let you use that money. If your account has more than two months’ worth of benefits, your bank can freeze the extra money.”
Incidentally, CFPB has a sample letter on its website you can use to tell collectors that your Social Security benefits are protected from garnishment. (www.consumerfinance.gov).
Getting out from under a time share is difficult. Of all the email questions I get for my column, time-share issues are the most prominent. I have been successful a couple of times, where my client gave the time share back to the sponsor by paying a year’s worth of fees.
First, contact the time-share company and plead your case. You should present as many facts as possible. Some time-share companies have hearts but from my experience, most of them do not. (They should be sent to the Wizard of Oz!)
Recently, an article appeared in Kiplinger’s Personal Finance, titled “Time-Shares On Sale.” (July, 2016). The author discussed Redweek, calling it the largest online time-share marketplace. I make no recommendations – one way or the other – and readers should do your homework and make your own decisions.
However, here are two important things to remember. First, be very careful if you are considering buying into a time share. Demand to see the sales contract before you sign and let your attorney review. Years ago, I pretended to be interested in buying a one-week share. The salesman made it sound fantastic. I asked for a copy of the sales contract and was told, “No, just sign it.”
I modestly explained I am a lawyer and have a bad habit of reading before I sign. I threatened to walk out, but they capitulated and gave me a sample copy. More than half of what the salesman promised was untrue; for example, I was told I would get one week a year at a 5-star hotel; the contract gave me less than four hours at that resort. And as Kiplinger reports, “if you suffer buyer’s remorse, you’ll have the right to cancel the purchase contract within five to 10 days of signing it, depending on the state where you’re buying the time-share.”
Second, if you want to sell, do not – repeat, do not – give any salesperson or company any money upfront. If you are successful in finding a buyer, have the closing take place in your attorney’s office.
Benny Kass is a practicing attorney in Washington, D.C. and in Maryland. He is not providing specific legal or financial advice to any reader. He wants readers to e-mail him, but cannot guarantee a personal response. He can be reached at: firstname.lastname@example.org.