The idea of many Americans buying a timeshare seems like it would be impossible to pass up — honing in on the consumer desire for frequent vacations at an affordable rate. But climbing maintenance fees and changing personal circumstances can make these costs unaffordable for owners. However, if you are thinking about stopping timeshare payments it is important to be aware of possible outcomes. This step-by-step guide on what happens if you stop paying will show you the impacts from credit scores to lawsuits and how you can escape all this mess by simply having an appropriate exit strategy, as CancelTimeshareGeek service provides.
What Are the Consequences of Not Paying Your Timeshare Fees?
Stopping your timeshare payments might seem like a way to alleviate financial strain, but it often leads to a cascade of consequences. The first and most immediate result is that your timeshare company will contact you about your missed payments. Here’s a breakdown of what you might face:
- Late Fees: Timeshare companies will typically charge late fees if you miss your payment deadline. These fees can compound over time, making the debt more burdensome.
- Higher Interest Rates: If you have a financed timeshare, the interest rate on your loan may increase due to non-payment, leading to higher overall costs.
- Loss of Usage Rights: When you stop making payments, you will lose the right to use the timeshare property until the account is brought up to date.
These initial issues can quickly spiral into more severe financial and legal problems, so it’s important to act early if you foresee trouble with payments.
Understanding the Legal Ramifications of Stopping Timeshare Payments
Timeshare contracts are legally binding agreements, stopping payments without a plan for the exit can result in severe legal repercussions.
- Breach of Contract: You violate your timeshare agreement when you cease payments, and you can be sued. The company is also entitled to take legal action against you for the recovery of unpaid amounts, and in some cases may seek consequential damages.
- Liens: If you are successfully sued by the timeshare company, they can place a lien on your other assets (e.g., real estate, vehicles) in order to collect the debt. That right there goes a long way toward nuking your financial freedom.
So, cease payments now without an attorney or exit firm like CancelTimeshareGeek and you may end up in a costly lawsuit.
What Happens to Your Credit Score If You Stop Paying a Timeshare?
Not paying your timeshare has serious knock-on effects for example on your credit rating. Missed payments will damage your credit — Timeshare companies report missed payments to credit bureaus, which unfortunately matter more for what they are not collecting rather than doing their due diligence.
- Credit Rating Reduction: For every missed payment your credit score drops. The longer you delay, the more harm done. Low credit scores can make it hard to get a loan, mortgage, or even rent an apartment.
- Collection Agencies: A default will cause the timeshare company to send your account off to a collection agency, and with it goes another report to one of those credit bureaus so they can drive your credit score further into the ground.
Will Your Timeshare Go Into Foreclosure?
One of the things that can happen when you do not pay your timeshare fees is that your timeshare goes into foreclosure. It is the same as a real mortgage here in that if you stop paying on your timeshare, just like a home loan, then they can take your timeshare back.
Timeshare Foreclosure Process Stages:
- Delinquency Notices: After several missed payments, the timeshare company will send you delinquency notices.
- Issuance of Demand Letters: To the extent any payments are still due, the company would issue demand letters calling for immediate payment of all outstanding amounts.
- Foreclosure: If payments remain unpaid, the timeshare company may start foreclosure proceedings to reclaim title to the property.
But not only will you lose your timeshare to foreclosure, but it can be disastrous for your credit score and financial health. That foreclosure will stay on your credit report for as much as seven years, making it harder to engage with future financial opportunities.
Can You Negotiate or Settle Your Timeshare Debt?
The best news is that the doors of timeshare companies are usually open to discussion, especially when they believe they will not recover their money by legal means or by foreclosing. Below are some of the possibilities:
- Payment in Full: You may be able to offer a one-time and lesser amount (than owed) if the education company dissolves the contract. This may be an option that timeshare companies prefer to a long legal process and foreclosure.
- Payment Plan: If you are in a sticky situation but would like to avoid more penalties, this may be for you, as it gives you an extended timeframe to pay off the overdue amount.
- Deed-Back Program: Some timeshare companies allow you to deed the property back and walk away, which is something worth discussing with them but isn’t guaranteed, and probably requires you to be up to date with payments.
You should work with experts in timeshare cancellation like CancelTimeshareGeek to help you advance these negotiations and see the best result of the circumstance.
The Role of Collection Agencies in Unpaid Timeshare Debts
If you ignore the debt, eventually your timeshare company could sell your debt to a collection agency. By time this you’re now dealing with a 3rd party collector and it can get even scarier from here. The collections companies are the worst with their harassing techniques.
What Can You Expect from a Collection Agency.
- Annoying Contact: Over and over again, this collection agency will use phone calls or emails to badger you for payment.
- Credit Damage: The collection agency will report the bad debt to Credit Bureaus and this, in turn, will further lower your credit score.
- Last Resort: If the amount of your debt is significant, some collection agencies may pursue a legal action against you.
This is why it is so important to consider professional help from places such as CancelTimeshareGeek before your debt gets even worse.
What Legal Actions Can Timeshare Companies Take Against You?
Timeshare companies have several legal avenues at their disposal when you stop making payments. Beyond foreclosure, they may:
- File a Lawsuit: Timeshare companies can sue you for breach of contract, seeking not just the unpaid amount but also legal fees, interest, and potentially damages.
- Seek Wage Garnishment: If they win the lawsuit, they could move to garnish your wages, automatically deducting payments from your paycheck to recover the debt.
- Place a Lien: A court-ordered lien can be placed on your other assets, which could include your home or car, preventing you from selling them until the debt is satisfied.
The legal risks are substantial, which is why consulting an expert in timeshare exit solutions is essential to avoid such outcomes.
Alternatives to Stopping Timeshare Payments
If it feels like your only option is to cease making payments on your timeshare, there are several other alternatives you should look into before allowing your debt to be considered in default:
- Rent Your Timeshare: In a box where you have to make payment but you can’t afford the charges you should rent to own and that will cover the payment till your solution output is known.
- Selling the Timeshare: It is still possible to sell a timeshare in today’s market, and perhaps it is something you no longer use anyway so it would be worth investigating.
- Timeshare Exit Companies: The help comes from timeshare exit companies like CancelTimeshareGeek, which offer services specifically geared to help timeshare owners legally get out of their contracts without getting further into financial difficulties.
How to Get Out of a Timeshare Without Financial Consequences
The only way to truly avoid the ramifications of ceasing your timeshare payments is exit the contract altogether long before you hit financial rock-bottom. Companies like CancelTimeshareGeek offer timeshare exit services aimed to guide you through this process in a way that has less financial and legal repercussions of just stopping payments.
Why Choose CancelTimeshareGeek?
- Professional Negotiations: CancelTimeshareGeek are experts in negotiation with timeshare companies and give you the best opportunity to exit your timeshare easily and successfully.
- Legal Knowledge: Timeshare contracts are very confusing and CancelTimeshareGeek has the ability to aid you exit without doing wrong with your contract or getting sued.
- True Life Experiences: Several timeshare owners have used the services of CancelTimeshareGeek and successfully terminated their contracts with many having saved themselves from the resultant catastrophic unpaid timeshare fees.
