Timeshare ownership combines real estate fees and travel expenses, leaving some owners in such financial hardship that they question whether or not they should continue paying for it. If your timeshare has become an unexpected burden, you may be considering the same.
Unfortunately, there are consequences if you stop paying for a timeshare. The good news is there are ways to avoid those consequences and achieve financial freedom. So in this article, we'll answer three questions:
A timeshare owner is responsible for an assortment of annual fees. From mortgage loan payments to the often hidden cost of maintenance fees, it seems to always be one more bill after another.
It's no wonder many owners want to walk away from their timeshare payments. However, if you abruptly stop paying, you will likely face extreme financial distress. See, unbeknownst to most owners, their agreements are life-long. Furthermore, failing to pay your fees can result in legal issues.
Many timeshare owners believe they don't have to pay maintenance fees and special assessments after paying their mortgage. That's not the case. This annual maintenance fee is how these resorts turn a profit every year. If you attempt to stop paying this timeshare obligation, the resort will do everything possible to collect these payments from you.
What starts with a barrage of phone calls soon escalates to collection companies if you still refuse to pay. The financial burden worsens as you now risk foreclosure and possible legal action. To truly free yourself from a timeshare, you need to find a way to cancel the purchase agreement.
There are often two culprits behind financially distressed timeshare owners. The excruciatingly high costs of timeshare mortgage payments and the annual maintenance fees. You may be wondering what these expenses are, so here's a breakdown of each:
If you stop paying your timeshare loan, you run the risk of foreclosure. During foreclosure, the lender files to take possession of the timeshare property so it can be sold at auction to cover any remaining debt you owe.
There are two types of foreclosure:
When you walk away from a timeshare agreement, you forfeit your vacation ownership rights and leave yourself open to legal issues. Abandoning your ownership breaks a deal and puts you at risk of foreclosure. It also may drag your credit score down for up to seven years.
Before you stop paying the annual fees, you need to consider the results of that decision. To fully understand what happens when you abandon your timeshare, here are a few of the most frequently asked questions we receive regarding the subject:
Essentially, yes. If you outright abandon your timeshare and refuse any further payments, the resort will make collection efforts, and you may face foreclosure. The resort then turns around and finds another buyer as a replacement. Be aware that your legal issues could linger for years while the timeshare developers get off scot-free.
You could end up in court if you stop paying the fees associated with your timeshare. Failing to pay your debt to a timeshare company will have you sent to a collection agency and could eventually place you in foreclosure. However, not all companies push for legal reparations and will constantly harass you with collection efforts.
A timeshare foreclosure can have a significant impact on your credit. Not only will your credit score likely decrease, but foreclosures can stay on your credit report for up to seven years. This credit status makes it difficult to qualify for a future mortgage or any other form of credit without high-interest rates.
If you want to get out of your timeshare agreement without damaging your credit score, the last thing you want to do is stop paying for it. Getting collection agencies involved in your agreement is a quick way to damage your credit score.
Instead, you will need to find a legal way to get rid of your timeshare without having your credit suffer. We've outlined several great options below.
Are you tired of dealing with the hassle of timeshare companies and paying maintenance fees? If so, you're one of many owners looking for a way out. Don't just up and quit, though, or you'll risk financial turmoil. Instead, check out these five great options to get rid of your timeshare:
Donating a timeshare to charity is sometimes easier than selling it. Plus, you feel good about the property going to a worthwhile cause. Many charity organizations will accept timeshare donations of all kinds. However, some organizations do not take them due to their annual financial obligations. Charities want to ensure they make a profit from the donation, so timeshares with little resale value are unlikely to get accepted.
If you find a charity willing to accept timeshares as donations, inquire about what that process would entail. While it may seem easy, nothing with timeshares ever is.
Many people want to stop paying their timeshare fees outright. But here's the catch, if you stop, you'll end up in an even worse mess. So, instead, you should inquire about working with timeshare exit professionals to help steer you in the right direction.
Wesley Financial Group, LLC* is home to many cancellation experts happy to help take a look at your situation. If you need some advice, reach out to them today!
*Wesley Financial Group, LLC, and its affiliates, successors, or assigns are not lawyers or a law firm and do not engage in the practice of law or provide legal advice or legal representation. All information, software, services, and comments provided on this site are for informational and self-help purposes only and not intended to substitute for professional advice, legal or otherwise.
