[ 2018 ] Is One's Credit Rating Affected by Defaulting on a Mexican Timeshare Purchase?

[rpennisi]

I agree with the giveaway/selling option. We have bought and sold quite a few timeshares resale since 1991. The two that I mentioned above were special circumstances and we could not give them away if anyone read the reviews here or on Trip Advisor - they are both lost causes.

We do have one that we are considering giving to a son and his wife as they seem to like going with us to our timeshares. They may not when they have to pay for it. It has 10 years left on the contract. I bought it resale for basically the cost of the then transfer - $400. They are going to this resort the first week of May and if they want it, we will pay the transfer fees and put their names on it. I will then teach then how to use SFX to go wherever they want to go. If they do not want it, it will be posted on TUG in the bargain section sometime this summer. We bought this 1 bedroom 2 bath unit for overflow to the beachfront unit because a really nice resort is next door - we send our guests there or use it for SFX exchanges. Our SFX expires at the end of this year and we just plan to go to our Mayan World and Buganvilias in the future.

PB Sunset Beach?

 

[pittle]

PB Sunset Beach?

Emerald Bay

 

[T-Dot-Traveller]

..... I think one problem "owners" of Mexican TSs have if they want to give their TS away is the high transfer costs that the resorts impose.

With that in mind, "owners" who want to get rid of what they have thus feel it's cheaper to default and not pay any transfer costs than to give it away and pay the transfer costs.

As a Grupo Mayan -Vidanta owner -
The details are a little more nuanced .

1) the transfer cost to immediate family ( children , grandchildren) is free - 0$ .

2) when resale transfer cost became 5x MF in fall 2005 , they also added MF on use only ( "no go/no pay") .so there is no annual cost unless you book a vacation .

Our 2006 Mayan Palace contract has both / per the addedum the MF on use only - started in the 5th year of ownership .This and the VF bonus week do not transfer on resale . These addendum DO transfer to family - no charge .

3) Contracts up to 2010 have a reno / 2nd MF every 5 years & a renewal cost at year 25 . This means that every 5 years there is an exit strategy ,that was installed by the developer .

IMO - Vidanta would be happy , if every owner of these older contracts called them & asked to give their contract back . Vidanta can take the registered week & recycle it into a Grand Luxxe contract for Vida Sales to sell .

4) Contracts since 2011 require a renewal payment every 10 years and likely always have the MF on use only feature .(the renewal is 1x or 1.5x of the current MF/use fee depeding on your contract specifics).

So while folks may regret buying and / or cannot easily resell - there is no on going costs for non use .

 

[PigsDad]

By stopping payments for the purchase. Of course it would also be stopping MF payments too, but that isn't what the thread header says.

Right -- defaulting on the purchase would also stop the MF payments, which would affect other owners. That was my point. I was just questioning how it would not affect other owners, as you claimed.

Kurt

 

[Karen G]

Right -- defaulting on the purchase would also stop the MF payments, which would affect other owners. That was my point. I was just questioning how it would not affect other owners, as you claimed.

Kurt

If the purchase was rescinded or defaulted, the sales team can just resell it and new owners would pay the MF.

 

[PigsDad]

If the purchase was rescinded or defaulted, the sales team can just resell it and new owners would pay the MF.

Big difference between rescinded and defaulted. If would-be buyers rescind a purchase, the developer still owns the week (it's as if the purchase never happened) and would continue to be responsible for the maintenance fees.

However, if an owner defaults on their loan and also stops paying for maintenance fees, it can take several years before the property is foreclosed and ownership goes back to the developer. For those years, the owner is not paying the maintenance fees, and therefore the other owners at that property have to cover the maintenance fees that are not being paid by the owner who defaulted. If enough owners are in default, it can significantly increase the maintenance fees for those who do pay.

Claiming that owners who are in default does not affect other owners is just plain false.

Kurt

 

[Eric B]

Big difference between rescinded and defaulted. If would-be buyers rescind a purchase, the developer still owns the week (it's as if the purchase never happened) and would continue to be responsible for the maintenance fees.

However, if an owner defaults on their loan and also stops paying for maintenance fees, it can take several years before the property is foreclosed and ownership goes back to the developer. For those years, the owner is not paying the maintenance fees, and therefore the other owners at that property have to cover the maintenance fees that are not being paid by the owner who defaulted. If enough owners are in default, it can significantly increase the maintenance fees for those who do pay.

Kurt

Probably true for a deeded week, but I'm not sure if makes much difference with a RTU. Particularly for points based ones, though not limited to those. If you don't actually own property, it doesn't have to be foreclosed, etc.

 

[ElectricCobraYoga]

So ? What is your point ? Do you really think a Mexican company can force an American living in the USA to pay their mf by reporting them to a credit agency ? I would like to know the process so if you know it please let us know. From what I have read I very much doubt they can.

Bill

Hi Bill
This is a very informative thread. I'm in Canada. Do you know any resources I could look up regarding them reporting on my Canadian Equifax?
Tamara
PS same person

 

[easyrider]

I don't know how it works in Canada. I do know Canada has a different Equifax system that doesn't report to the USA and visa a versa. I found this out when trying to fiance a car in Vancouver. You would need to research this a little on the Eqifax Canada website or just call them and ask. I wonder how many Canadians defaulted on Mexican timeshare loans in the past ?

Bill

 

[pianodinosaur]

I think that timeshares are a luxury. I now believe that taking out a loan to pay for a timeshare is a bad idea. Therefore, my advice is that if you cannot afford to pay for the timeshare up front, then maybe you should not purchase the timeshare in the first place.

 

[bankr63]

Hi Bill
This is a very informative thread. I'm in Canada. Do you know any resources I could look up regarding them reporting on my Canadian Equifax?
Tamara
PS same person

Highly unlikely that they could hit your credit bureau in any way. Equifax and Transunion in Canada allow reporting from partners that are associated with them; it is unlikely that your Mexican financing company would be. They also report registered PPSA's (personal property security act - aka liens), but it would have to have been registered when you purchased and you would know as the debtor gets a letter from the government indicating that the PPSA has been registered. AFAIK, loan collection companies in Canada cannot register a collection after the fact, the original debt would have to have already been reporting. It actually shows the write-off when transferred to collections and STOPS reporting when the original debt written off to collections. Note that this is for Loans and Mortgages. If you are only paying for a "vacation club fee" or are into the maintenance fee only stage it would not qualify to report on your bureau at all.

You can request a free copy of your credit report to see if the debt has ever been reported on your bureau.

 

[amanda008]

i dont usually buy this ideas but its so real ,i have unwanted collections ,late payments , tax liens and of course charged off accounts , i have tried many means to get my profile back and have my score up excellently ,it happened just like magic when INSERTRANDOMSCAMMERNAMEHERE fixed my credit profile in few days , he removed all unwanted collections, late payments ,tax lien and increased my credit score from 416 to 806 .i don't believe at first until it all happened . ever since then i have been having a perfect credit profile.

 

[petenjen]

Yeah, another POS spammer...

 

[T-Dot-Traveller]

Bump - good read / (not a lot else to do at home these days but read & watch TV)

 

[Rumple10]

The simple answer is "YES."
Of course it depends on the individual resort and its policies but, as mentioned, the U.S. collection companis WILL report you to the credit bureau.

Yes, this happened to us. Short story, we were lied to at Puerto Gardens, bought a TS April 2019, & put down a hefty down payment before coming home and discovering that nothing was as promised. We never made another payment, and they recently reported us to Monterey Financials in CA, a collection agency (& attorneys). They in turn reported us to TransUnion. We are at our wits end on what to do. Any advice/info would be greatly appreciated.

 

[Rumple10]

The standard response to people who inquire about defaulting on a Mexican timeshare purchase is that it will affect one's credit rating. Does anyone have any real actual experience of that happening? Has anyone simply stopped paying either their maintenance fees (if their timeshare is already paid for) or stopped making payments on a loan for the purchase of the timeshare? What happened?

YES it happened to us, see my reply in thread below.

 

[T-Dot-Traveller]

Yes, this happened to us. Short story, we were lied to at Puerto Gardens, bought a TS April 2019,........................they recently reported us to Monterey Financials in CA, a collection agency (& attorneys). They in turn reported us to TransUnion. We are at our wits end on what to do. Any advice/info would be greatly appreciated.

Hi zephyr 555,
Thank you for letting the TUG community know .

I believe you can dispute a report to Trans Union
I would start that process and once you have reached a real person I would forward the entire TUG transcript of both Vallarta Garden Threads .

It sounds like there is no loan - just a down payment you have accepted as a loss
so the information in this thread should help in your discussion with Trans Union .

the collection agency - Monterey Financial may just be one of those bottom feeders that buys “debt”
for pennies on the dollar . Reporting you to Trans Union is probably just another pressure tactic to harrass
you into giving them some money .

 

[Rumple10]

Hi zephyr 555,
Thank you for letting the TUG community know .

I believe you can dispute a report to Trans Union
I would start that process and once you have reached a real person I would forward the entire TUG transcript of both Vallarta Garden Threads .

It sounds like there is no loan - just a down payment you have accepted as a loss
so the information in this thread should help in your discussion with Trans Union .

the collection agency - Monterey Financial may just be one of those bottom feeders that buys “debt”
for pennies on the dollar . Reporting you to Trans Union is probably just another pressure tactic to harrass
you into giving them some money .

Thank you so much. Sounds like a plan. I’ll let you know how it goes!

 

[easyrider]

Yes, this happened to us. Short story, we were lied to at Puerto Gardens, bought a TS April 2019, & put down a hefty down payment before coming home and discovering that nothing was as promised. We never made another payment, and they recently reported us to Monterey Financials in CA, a collection agency (& attorneys). They in turn reported us to TransUnion. We are at our wits end on what to do. Any advice/info would be greatly appreciated.

The way this happens is if you used a line of credit from the USA making the loan enforceable in the USA. If it was a Mexican line of credit that financed your purchase it would not follow you to the USA. The other way this happens is when an USA based debt collector buys the debt and is able to get you to sign a new payment agreement.

Bill

 

[Rumple10]

The way this happens is if you used a line of credit from the USA making the loan enforceable in the USA. If it was a Mexican line of credit that financed your purchase it would not follow you to the USA. The other way this happens is when an USA based debt collector buys the debt and is able to get you to sign a new payment agreement.

Bill

OH.... well we certainly didn’t sign a new agreement with this US collection agency. Good to know.... hmm. How do we find out if the debt was indeed sold? (also: correction, I meant to say Vallarta Gardens)
Thanks so much for your input!

 

[T-Dot-Traveller]

... hmm. How do we find out if the debt was indeed sold?

I believe this is how it works .( Specifically & in general ) especially when it comes to a “debt” like this:
(ie) harassment vulture debt collectors - bottom feeders .

1) Vallarta Gardens decides you will not pay / probably because you told them to go pound sand .
2) They sell the debt for pennies to a bottom feeder - probably as a package with many other similar “debts”
[Vallarta Gardens likely expects no further “income “ ]

sometimes the smart people who refuse to pay this “debt” - will get a new call - months or even years later-from a different collection agency - who again bought a package for fewer pennies .

As easyrider said - if you engage with Monterey F. & sign an agreement - so they stop the harassment - they win .
IMO- contact Trans Union.

 

[Rumple10]

I believe this is how it works .( Specifically & in general ) especially when it comes to a “debt” like this:
(ie) harassment vulture debt collectors - bottom feeders .

1) Vallarta Gardens decides you will not pay / probably because you told them to go pound sand .
2) They sell the debt for pennies to a bottom feeder - probably as a package with many other similar “debts”
[Vallarta Gardens likely expects no further “income “ ]

sometimes the smart people who refuse to pay this “debt” - will get a new call - months or even years later-from a different collection agency - who again bought a package for fewer pennies .

As easyrider said - if you engage with Monterey F. & sign an agreement - so they stop the harassment - they win .
IMO- contact Trans Union.

we spoke once with someone at TransUnion who didn’t seem to know much. We’ve filed a dispute with them about the Vallarta Gardens (now Monterey Financial) “debt” will call again. Hopefully we can get further with the next person. I’m asumming that if we explain the lies and also show what others have been through with them that TransUnion will take it off? Also the fact That the purchase was in Mexico, but that may be a mute point now that they have evidently completely sold the “debt” to a US collection agency (Monterey Financial). I bet you’re right that MF bought a chunk of VG TS “debt”, because when we tried to tell them everything that happened, they were like , “ho hum“
Thank you so much for your support and input! (Can’t believe we fell for their BS) what a nightmare.

 

[easyrider]

we spoke once with someone at TransUnion who didn’t seem to know much. We’ve filed a dispute with them about the Vallarta Gardens (now Monterey Financial) “debt” will call again. Hopefully we can get further with the next person. I’m asumming that if we explain the lies and also show what others have been through with them that TransUnion will take it off? Also the fact That the purchase was in Mexico, but that may be a mute point now that they have evidently completely sold the “debt” to a US collection agency (Monterey Financial). I bet you’re right that MF bought a chunk of VG TS “debt”, because when we tried to tell them everything that happened, they were like , “ho hum“
Thank you so much for your support and input! (Can’t believe we fell for their BS) what a nightmare.

How the selling of debt works is a debt collection company ends up with the delinquent account, usually for very little. Regarding Internation debt, the only way it becomes enforcable is when a collection agency makes a deal with the debtor. That promisory note signed in the USA is now enforcable.

If it is debt that enforcable then that debt can be taken to court to get a judgement. To get a judgement in court the debt collector must prove your account is delinquent. International debt is not able, for the most part , to be processed in the USA. The credit reporting agencies in the USA do not report on any credit lines that do not originate from the USA without a judgement.

So basically, if Transunion shows you having a collection, you must have used your own credit line to purchase the timeshare. When you stop paying on your own credit line, that you used to purchase a timeshare in Mexico, then collection will happen. When you stop paying on a promisory note from a Mexican resort, nothing happens in the USA, except the posibility of phone calls or threats to your credit.

Bill

 

[pvacay]

I quit paying for a timeshare in Mexico. Now a US collection company named Monterrey has definitely hit my credit and reports EVERY month with the new interest amount. Anyone have any good information on how to fight this since supposedly this shouldn't happen. I have disputed it and just keeps getting tossed back as debt. However, this is unsecured debt that originated in Mexico and is not supposed to be reported in the US????

 

[Rumple10]

I quit paying for a timeshare in Mexico. Now a US collection company named Monterrey has definitely hit my credit and reports EVERY month with the new interest amount. Anyone have any good information on how to fight this since supposedly this shouldn't happen. I have disputed it and just keeps getting tossed back as debt. However, this is unsecured debt that originated in Mexico and is not supposed to be reported in the US????

Hi, the EXACT same thing happened to us. Vallarta Gardens have been horrible - from a high pressure sales pitch full of lies, to a debt which we refused to pay after finding out we could not trade these weeks for ANY weeks anywhere, much less one week for four, like they claimed! We gave them a big chunk for a down payment and have since never made a payment after figuring out they were scam artists. They reported us to Monterey credit collections in Ca US. We called a lawyer who told us to ignore it, that yes, it WILL ding our credit (grrr), but it would never win in court, Because it was a sale in Mexico. He said it would not be worth their time or money to bring it to court.Meanwhile we disputed the charges with Monterey Collections and credit reporting agencies, And federal consumer agency, but to no avail. So we are going by our lawyers advice and just ignoring them. This is not something that sits well with us, however, but it is what it is, it seems.