what if I stop payment on timeshare?

Hi

We feel so foolish for purchasing a timeshare. We are so busy with our investment rentals and vacationing with friends & family that we do not have time to use our timeshare and get aways. Our timeshare was purchased directly from the resort and the payments are charged to a credit card monthly. We have not used the unit as it will not be comleted for another year. And we have not used any of the "unlimited" getaways OR the cruise credits. As we do not have the time or energy to put into selling our timeshare, (appears to be almost impossible right now) we would like to know the results of not making our payments. Can anyone tell me the negative results if we simply stopped making the monthly payments?

Thanks for reading
Dee

Your credit score will be affected negatively

Just like not making payments on an auto loan, if you start not making payments then you'll probably get reported to the credit bureaus. Miss enough and the place will get repossessed and you'll be charged for not only what you owe on it but for the legal fees that are used against you. Other fees (late payment fees, etc.).

Not worth it if you need a good credit rating. You can offer to give it back to the resort but they are unlikely to take it back - but ask anyway. Read the contract you signed and see if there are any completion dates promised. If they miss it you may be able to do something.

Hello There, Mr. Bill Collector. How Nice To See You (Again).

Can anyone tell me the negative results if we simply stopped making the monthly payments?

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Click here for a clue.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

The first thing that would happen is your credit rating would drop like a stone. You don't have many options other than trying to sell it yourself and that would most likely get you 40 to 50% if you are lucky, especially since the place isn't even finished yet. Another one is to rent it when it is open and that might bring in enough to pay the maintenance fee which you'll have to pay once it's open.
KCI's Wingman

AwayWeGo said:

Click here for a clue.

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In case you don't see the link in the upper-right corner for the entire thread that Alan referenced, here it is...

http://www.tugbbs.com/forums/showthread.php?t=87549

Thank you for your responses.

Dear Dee,

After doing some research, I have concluded that you are legally liable for the maintenance fees forever unless your contract stipulates otherwise. Your options are limited. Sell (not easy), donate (takes time and luck), giveaway to someone who wants it, or pay a service such as Timeshare Relief to take it off your hands. All options involve a deed title transfer. If you calculate your annual maintenance fees with increases and possible special assessments projected over 10 years of non use, you may find the giveaway option as reasonable. One other option that requires work and advertising costs (no deed transfer) is to rent. Hope this helps. The only ways out of the contract (without seeing the specific language) is death or filing for personal bankruptcy. I hope this helps you a bit. Don't feel foolish, many including myself are in your situation. Bob

We feel so foolish for purchasing a timeshare. We are so busy with our investment rentals and vacationing with friends & family that we do not have time to use our timeshare and get aways. Our timeshare was purchased directly from the resort and the payments are charged to a credit card monthly. We have not used the unit as it will not be comleted for another year. And we have not used any of the "unlimited" getaways OR the cruise credits. As we do not have the time or energy to put into selling our timeshare, (appears to be almost impossible right now) we would like to know the results of not making our payments. Can anyone tell me the negative results if we simply stopped making the monthly payments?

Thanks for reading
Dee

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What would happen if you defaulted on any other loan? The answer is the same.

You default on a loan, they report it as bad credit and then come after you to collect. Since it's probably a rather large sum, they're likely to get a judgement against you and then garnish your wages/income.

Stop paying for your house, you'll find out. Same thing.

dougp26364 said:

What would happen if you defaulted on any other loan? The answer is the same.

You default on a loan, they report it as bad credit and then come after you to collect. Since it's probably a rather large sum, they're likely to get a judgement against you and then garnish your wages/income.

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Yes, and some assume the problem just goes away in 7 years, as it is removed from your record at 7 years, BUT, it will stay for 7 years after the last attempt at collection, and after the company finally gives up. So if the company continues to try to collect for 3 years before throwing in the towel and writing you off, it will be another 7 years after those 3 years.

Your word is your honor, a contract is signed in good faith that you will pay it back. It can be a hard lesson, and there are those of us here that learned the hard way, but you just never want to make that same mistake again. I know people who bought 4 timeshares from the developer and were divorced after their money problems were too much for them. It's best to learn from the first mistake.

h2opaqi said:

Dear Dee,

After doing some research, I have concluded that you are legally liable for the maintenance fees forever unless your contract stipulates otherwise. Your options are limited. Sell (not easy), donate (takes time and luck), giveaway to someone who wants it, or pay a service such as Timeshare Relief to take it off your hands. All options involve a deed title transfer. If you calculate your annual maintenance fees with increases and possible special assessments projected over 10 years of non use, you may find the giveaway option as reasonable. One other option that requires work and advertising costs (no deed transfer) is to rent. Hope this helps. The only ways out of the contract (without seeing the specific language) is death or filing for personal bankruptcy. I hope this helps you a bit. Don't feel foolish, many including myself are in your situation. Bob

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Why would donating this timeshare help, when there is a loan attached? Timeshare Relief is no relief. No research necessary here. A loan requires repayment or the consequences of defaulting on a loan.

h2opaqi said:

Dear Dee,

After doing some research, I have concluded that you are legally liable for the maintenance fees forever unless your contract stipulates otherwise. Your options are limited. Sell (not easy), donate (takes time and luck), giveaway to someone who wants it, or pay a service such as Timeshare Relief to take it off your hands. All options involve a deed title transfer. If you calculate your annual maintenance fees with increases and possible special assessments projected over 10 years of non use, you may find the giveaway option as reasonable. One other option that requires work and advertising costs (no deed transfer) is to rent. Hope this helps. The only ways out of the contract (without seeing the specific language) is death or filing for personal bankruptcy. I hope this helps you a bit. Don't feel foolish, many including myself are in your situation. Bob

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If there's a loan on this timeshare then it's more than just a title transfer. You also have to have someone who can finance the loan amount in their name.

Timeshare relief won't take a timeshare that has a mortgage attached to it. You have to have clear title and all loans/liens paid and released before timeshare relief will relieve you of your money and your timeshare.

Charities won't take it as a donation until the loan is paid off.

You can't give it away unless the loan is paid off, either by the current owner or the person taking that timeshare. That amounts to selling the timeshare for the current loan amount and, that's very unlikely to happen.

In the end, the loan HAS to be paid off one way or another. There is no getting out from under that loan without the borrower either paying it off or, getting someone to buy this timeshare for the loan amount.

When is the timeshare supposed to open for occupancy and are they on schedule? Is the timeshare US or foreign?

I know this suggestion doesn't address the original question, but to soften the expense, perhaps the OP could join TUG, register the TS for the best possible week at the resort and rent it here. Or Craig's list. List it for sale on TUG Marketplace. Read the How to Sell stickies. I know it will take some time and commitment to get rid of, but ultimately will either reduce the cost of ownership or get rid of the TS.

Oops!. I missed that the TS doesn't even exist except on paper. I too hope that there's a date certain completion date on the papers the OP has. If so, I'd contact the AG in the state where the TS is and go for a 'breach of promise' defense to get out of it. Of course, first try to surrender to the developer. This will be difficult and costly both in time and money. Sorry.

Jim Ricks

Worth a try.... contact the resort inquire about them taking it back, since you don't have anything yet, and keeping the funds you have already paid as a forfeit.

Look for an Out

Maybe you can find some loophole that the timeshare is not what was promised and demand a refund because it is not what you were told it would be. Probably happens in many timeshare presentations that are built and maybe more of the ones not built.Maybe in todays economy they have to cut back on the project.

Chances That Will Work = (1) Slim & (2) None.

cgeidl said:

Maybe you can find some loophole that the timeshare is not what was promised and demand a refund because it is not what you were told it would be. Probably happens in many timeshare presentations that are built and maybe more of the ones not built.Maybe in todays economy they have to cut back on the project.

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Nothing counts except what's in the signed documents -- i.e., all those stretchers, fibs, exaggerations, embellishments, misrepresentations, tall tales, etc., from the mouths of the timeshare sellers don't count.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

Hold them to any date they gave - other than that it's not good

AwayWeGo said:

Nothing counts except what's in the signed documents -- i.e., all those stretchers, fibs, exaggerations, embellishments, misrepresentations, tall tales, etc., from the mouths of the timeshare sellers don't count.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

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That part is exactly right. Only whats on paper counts (and maybe the OP will be EXTREMELY lucky and it will include a completion date for the building that they miss. THAT may be a rare way to get out).

Otherwise the truth is that selling any timeshare isn't easy and one that isn't paid off (which will almost always mean it was purchased from the Developer meaning the buyer paid an incredibly high premium over the resale value) is virtually impossible to sell. No one that is aware enough of resales to be in the market is likely to take over the payments (if that is even allowed) as they would know the value isn't there. And until that loan is paid off - a completely different issue than the ongoing annual fees you may also want out of if they have started on an uncompleted resort - you are even more "on the hook" financially than the normal seller. And the loan people are much more likely to come down as hard as possible and with more damage to your credit (not that any is good) than past due fees from an Association might cause.

Since this place doesn't even actually exist yet I would go all out to give it back to the developer (who most likely is ALSO hurting and won't be open to the idea) even if it means giving up what has been paid so far and perhaps even a "buy out" (with a written guarantee that you are out of the commitment - not the vague and possibly untrue promises of a "Timeshare Relief" type probable con outfit) to get out of the remaining balance. Otherwise pay the bills and try to rent it to get some/all of the money back or pay it down enough to make it a viable purchase on resale. The worst choice, IMO, is going delinquent on a loan as it's no different than any other and would hurt your credit badly.

Does it make any difference if the timeshare you own is out of the country like Mexico or Canada? Just wondering if you stopped paying and the timeshare you purchased is out of the country, would it have the same impact to your credit?

The buyer of a TS does not sign the deed, and the signed contract is with the seller(who has no interest at this time) not the HOA. So there is no signed paperwork for MFs. Where does this obligation come from and how can it be collected on except forclosure of tax sale?

It's all in the deed

e.bram said:

The buyer of a TS does not sign the deed, and the signed contract is with the seller(who has no interest at this time) not the HOA. So there is no signed paperwork for MFs. Where does this obligation come from and how can it be collected on except forclosure of tax sale?

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The deed has all the obligations attached. Since the buyer/owner has to agree to accepting the recording of a legal deed they are the ones responsible until they find a willing owner. By its nature a deed says the seller has the right to sell & the new owner accepts those rights/obligations. Its common law - thousands of years old - so questioning how property is transferred/deeded isn't going to get you anywhere (unless a fraudulent deed is involved of course).

Any one know a lawyer with timeshare exposure?

You need a referral to the appropriate lawyer to get you out of this.

Fortunately for society and other timeshares owners, there is no way out that will keep your credit intact. Everyone should meet their obligations. It doesn't seem to me that "being too busy" to use your timeshare is an ethical, moral, legitimate reason to dump your responsibilities. I have real sympathy for people who get sick and their circumstances change dramatically because of it and they can't pay because of medical bills.