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What happens when you default on a timeshare?

While owning a timeshare may seem nice at first, it comes at a cost in the form of a few never ending fees: annual maintenance fees, additional property fees, and – if it applies – your timeshare mortgage loan payment. If you're not able to make any of these payments towards your timeshare obligation, the resort developer or timeshare management group could report you to a credit bureau. Or even worse, they could take you to court over the foreclosure of your timeshare unit. 

How do timeshare foreclosures work? 

When you miss payments over some time, it is usually written into an agreement that the resort developer can go to court to foreclose on your timeshare unit. This is the result of you failing to agree upon the terms you signed on your agreement when you purchased the timeshare. When it comes to foreclosure, there are two types – judicial and nonjudicial. According to, judicial foreclosure is by judicial sale and it usually involves the sale of the mortgaged property under the supervision of a court. The proceeds go first to satisfy the mortgage, then other lien holders, and finally the mortgagor/borrower if any proceeds are left. Judicial foreclosure tends to apply to deeded timeshare the most. According to, nonjudicial foreclosure is authorized by many states if a power of sale clause is included in the mortgage or if a deed of trust with such a clause was used, instead of an actual mortgage.

How many missed payments until timeshare foreclosures take place?

It’s hard to say just how long you have to make a payment before foreclosure becomes a serious outcome, mainly because every resort company operates differently. While one resort may take a few payments as a call to action, others might be willing to be more lenient with you, especially if there is an established homeowners association that backs other timeshare owners. While this is rare, it has been known to happen that homeowner associations have reserves to help out timeshare owners who are struggling financially. 

Another factor coming into play here is the state or country in which you own your timeshare. Many states seem to have different laws on the foreclosure of the property. Some states will even map this out differently, specifically for timeshare purchases. This should be something you research before buying your timeshare. You have to know your rights and how they pertain to you depending on your location. Especially if you’re buying a timeshare that’s not in the state you currently reside.

Can additional fees also lead to foreclosure?

Yes, many timeshare resorts treat timeshare maintenance fees at the same level as loan payments on the timeshare itself. This is because, in the eyes of the resort or property managers, a maintenance fee payment is just as meaningful towards the success of their property. Timeshare maintenance fees are used by a timeshare management company to ensure people are getting to use clean and up-to-date facilities/amenities.

While this can be a hard payment to make, due to the increase every year, it is crucial to avoid any issues with foreclosure or negative credit history.

Can a timeshare hurt my credit?

The short answer? Yes. If you're a timeshare owner, your credit can absolutely be tarnished. This happens when owners miss on a monthly mortgage payment or fail to pay any additional fees like maintenance fees, taxes, or special assessments.

In most cases, after an owner's first payment is missed, a collection effort will be made by either the resort developer or homeowner’s association. Consider this a warning, because the management company hasn't gone to a third party outlet yet. However, this so-called warning is just the start of the owner's credit report or credit score being tarnished.

Another factor in play here is your interest rate on your mortgage. Missing payments could potentially spike your total amount due (high interest rates), making it nearly impossible to pay off anytime shortly, which in a roundabout way can also hurt your credit.

In some cases, if you're fortunate, your timeshare management company may not report to credit bureaus or even a collection agency. In this instance, your chances of having your credit report hurt by timeshare could be foreclosure.

How much does timeshare foreclosure affect your credit score?

According to, a foreclosure will drop your FICO score at least 100 points. FICO credit scores, which happen to be the most popular type of credit score, range from 300-850. This means that a timeshare foreclosure could hand you a significant loss in your score. goes on to talk about how a timeshare foreclosure will have more of an effect on an owner who holds a higher credit rating, as opposed to an owner whose credit score is already lower.

If you find yourself in a situation that continues to throw a financial burden on your family, you might want to start examining other options to get out of your timeshare.

Can you just walk away from a timeshare?

Much like owning a house, walking away from a timeshare can eventually end in foreclosure. Since timeshare property is treated like actual real estate, the foreclosure process is the same. If you continue to stop paying on your loan, the timeshare company can go to court and file a foreclosure lawsuit to obtain the rights to your unit and take it back. While it mainly depends on what state you have your timeshare in, this process can take about one year. 

A lot of individuals tend to argue that if their timeshare loan payment is fully paid off or they have completely paid in full for their unit, they should be able to just walk away. However, this is not the case because of annual timeshare maintenance fees. As mentioned above, the annual timeshare maintenance fee is treated with the same priority as timeshare loan payments.

The best option for leaving your timeshare

With a lot of financial obligations, timeshares tend to give owners nothing but a life full of stress. Fortunately, if you were lied to or misled during the sales proceeding of your timeshare, there is a solution for you and your family – contact a timeshare cancellation company. Some might tell you to get in touch with a law firm, lawyer referral service, or realtor, but selling a timeshare is very difficult to navigate and lawyer fees are too expensive for a non-guaranteed termination. This is why getting in touch with a trusted cancellation company is your best option. When searching for the right exit team, you're going to want to make sure you try to find a staff full of seasoned veterans that know what they're talking about. You will also want to make sure and sign on with a team that offers a 100% money back guarantee. This way, you'll receive a full refund if your timeshare isn't terminated within an agreed-upon segment of time.


Defaulting on a timeshare isn't fun for anyone. A lot of timeshare ownership interest is lost after people start to realize their property wasn't all it was made out to be. But you have to keep your head up and move forward, and you can't just stop paying. It’s important to remember that it’s always the timeshare owner’s decision to stop making payments; no one else can be held accountable for halting actions but you. This is why you have to weigh your options and do your research. The last thing you want is to be bombarded with phone calls about how you're behind on your timeshare maintenance fees or missed timeshare payments altogether.

Just like you would with your bank account or credit card, pay close attention to the people you let have access to your timeshare information. Remember to be careful with who you give your email address, phone number, or any other contact information to when looking for a cancellation company. There are a lot of fraudulent and phony exit scams that will send your case to lawyers for tips and legal advice. You must be sure to sign on with a cancellation team that works from within and offers a 100% money back guarantee.

Timeshare ownership can make for a lot of stress for any family to plan their future finances. Luckily, cancellation is waiting around the corner for anyone who was manipulated during the purchase of their unit.

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