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

[easyrider]

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.

Maybe have your attorney sue the collection agency.

 

[dioxide45]

Is it possible that these loans used to purchase the timeshares were actually from a US based company written on US based notes? Sure it was for a Mexican timeshare, but a US company could have still lent the money for the purchase.

 

[Rumple10]

Maybe have your attorney sue the collection agency.

That’s a thought! I’ll keep that in my back pocket However at this point, even though it’s listed in our report as delinquent, our credit rating hasn’t gone down. If we start seeing trouble there, we will bring in the big “guns”. Won’t be cheap, tho, so trying to avoid that.

 

[Guy_Larue]

Hi,

Longtime reader- first time member. Wish I had seen this website 10 years ago when I purchased our RTU timeshare in Cabo.

I can speak to that- I have a timeshare that I purchased 10 years ago- had a loan- made all the payments and now 'own' it outright. My story is typical- I've paid the MF every year since I purchased it- the MF has gone up from $680 to $960 as of 2020. I have never used it- the few times I tried to book- I realized that it wasn't as easy as they had made it sound in the presentation. It is a floating week in Red Season.

In any case- I made a decision last year to stop throwing $ at it- I didn't pay the MF (due January 31st, 2019)- received a notice every month with the 10% late fee tacked on- very little contact from the resort other than the letters.

Had a few calls from various real estate companies offering to sell the timeshare- ignored those.

I looked into transferring/selling the TS- but the resort has an exorbitant transfer fee to make it prohibitive to dump it on the resale market- where it isn't worth much anyway.

Received a phone call from the resort in the spring of 2020- asking for payment of late MF and the one due in 2020. I asked if I could surrender the contract and was told that that I could for $1800 US and the past due maintenance fee.

I declined.

So- now it has gone to a collection agency in California- Monterey Financial.

They've called a bunch of times and sent some emails.

Not sure if they will hit my credit- but based on my research- it seems very difficult/impossible to collect from a Canadian citizen in my jurisdiction- as they need to be licensed in my area to collect.

Any advice?

Thank you.

 

[dioxide45]

Any advice?

Continue to ignore them.

 

[Guy_Larue]

Continue to ignore them.

Thank you for the quick reply.

So- would you acknowledge the debt? Or tell them that you dispute it? The reason I ask is the statute of limitations in my area is limited- 2 years from the date of last payment- so it looks like the debt may be time barred (still owe it- but limited means for them to collect as they won't get a judgement in my jurisdiction based on the statute of limitations being over).

I can certainly continue to ignore them- that isn't a problem.

 

[Passepartout]

I can certainly continue to ignore them- that isn't a problem.

A TUGger, @Grammarhero tracks these things and of the half dozen or so Canadians who've reported back that they defaulted, none had their credit dinged. As I said in another thread, they're all bark and no bite. Sometimes though, they bark pretty loud.

Jim

 

[Grammarhero]

Thank you for the quick reply.

So- would you acknowledge the debt? Or tell them that you dispute it? The reason I ask is the statute of limitations in my area is limited- 2 years from the date of last payment- so it looks like the debt may be time barred (still owe it- but limited means for them to collect as they won't get a judgement in my jurisdiction based on the statute of limitations being over).

I can certainly continue to ignore them- that isn't a problem.

@Guy_Larue
out of 8 TS defaults by Canadians reported on TUG, 0 got reported to the Canadian credit agencies. Check out the links below. One Canadian MF defaulter was told to me in confidence, so I cannot reveal that.

If you make the hard decision to default, mind telling us if your credit got affected? It would help tuggers in similar situations moving forward.

https://tugbbs.com/forums/threads/a...fees-what-happened.296893/page-7#post-2396547

https://tugbbs.com/forums/threads/canadian-with-a-timeshare-in-florida.298837/#post-2367946

https://tugbbs.com/forums/threads/a...fees-what-happened.296893/page-3#post-2352822

 

[Guy_Larue]

Of course. I'd be happy to. One of the most irritating things about this particular resort is that when I had a loan on it (2014 with a couple of years to go) is that they increased my loan amount by $400 due to a Mexican VAT increase- so in my opinion that broke our contract at that point- but I continued to pay as I pay all of my bills.

Still a little worried about the annoying calls, etc- but they only have a few more months based on the statute of limitations in my part of the country from when I last paid them/the MF debt was defaulted- so waiting until then to fight back as I don't want acknowledge the debt and have the clock reset on the debt.

 

[bjones9942]

... Still a little worried about the annoying calls, etc- but they only have a few more months based on the statute of limitations in my part of the country from when I last paid them/the MF debt was defaulted- so waiting until then to fight back as I don't want acknowledge the debt and have the clock reset on the debt.

Just an FYI - Statute of limitations has little effect on the calls you'll get from collection agencies. In the USA, they are *supposed* to follow your direction and stop calling when you tell them you want to correspond by mail only, but they seldom do. I had a $60 phone bill that I refused to pay because there were no cell towers for that company near my home. Every time I called to complain (while I was a customer), they would tell me a new tower was going up 'next month'. Next month never came. They weren't providing the service I'd contracted for so I decided to take a stand. The amount quickly grew to over $600. I declined to pay the $600+, and they declined to adjust the amount. I also never acknowledged owing anything. This was about 15 years ago. Statute of limitations has long since applied, but my 'debt' keeps getting resold and the new collection companies always make a series of calls threatening to take me to court. It's also long since rolled off of my credit report, and when it was on I disputed it with the reporting agencies. Bottom line is you'll likely get calls until you pay or you die.

 

[lemor]

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, I was surprised by an 8

There is no way for the Mexican timeshare rtu contract to be enforced in the USA. A person could just stop making payments and I doubt the resort would spend any time on the mater whether the contract obligations are paid or not. If a buyer gave a down payment, which is often the case, to get the down payment back after the rescission period has ended, could require a Mexican Court decision.

So the buyer from the USA can sue the Mexican Resort in Mexico but the Mexican Resort can not sue the American buyer in the USA to get a judgement without jumping through many hoops. If the Mexican Resort attempts to collect without a proper judgement they would be in violation of the USA's Federal Laws regarding collections.

https://travel.state.gov/content/tr...ernl-judicial-asst/Enforcement-of-Judges.html



Bill

$8400 in 2018, Yes, they can, They did it to me. Its just a report they know they can't get a judgement but they can mess up your credit score for 7 years. I had already paid 3400 dollars and had not used it once, I contacted and let them know that they needed to sell the time share to someone else, that I had paid too much and was not using it. To take the profit they had already made without use. I think this can be open to fraud and to extortion, that was not my case but I can see how easily they can go after someone on a debt that is not enforceable in the USA. It should not be allowed. Basically they contract a USA based collection agency show the contracts and if the USA collection agency believes its legitimate they will try to basically extort you to pay because the contract is not enforceable in the USA. I contacted the credit agencies and pointed out the fact the contract was a Mexican contract and that it was not enforceable in the USA. The results was a mixed bag. 2 agencies dropped the collection TransUnion, Equifax Dropped it , Experian did not , they replied that they analyzed the debt and it was deemed real. I still have 2 years left before the collection disappears it now up to 14k 5 years later. If you applying for a home loan in the next 7 years or any type of loan its best to payoff the debt, even if it appears in one credit bureau its done the damage it intended. And removing it its not 100% guaranteed.

 

[lemor]

There are no Federal Laws regarding enforcement of judgments from foreign countries. Any attempt to get around this to collect would likely be in violation of the Fair Debt Collection Practices Act because the foreign company would need a judgement from a US Court to attempt collection. Without a court judgement from a court in the USA there is no way the foreign company can report you to the Credit Reporting Companies to tarnish your credit report.

Bill

$8400 in 2018, Yes, they can, They did it to me. Its just a report they know they can't get a judgement but they can mess up your credit score for 7 years. I had already paid 3400 dollars and had not used it once, I contacted and let them know that they needed to sell the time share to someone else, that I had paid too much and was not using it. To take the profit they had already made without use. I think this can be open to fraud and to extortion, that was not my case but I can see how easily they can go after someone on a debt that is not enforceable in the USA. It should not be allowed. Basically they contract a USA based collection agency show the contracts and if the USA collection agency believes its legitimate they will try to basically extort you to pay because the contract is not enforceable in the USA. I contacted the credit agencies and pointed out the fact the contract was a Mexican contract and that it was not enforceable in the USA. The results was a mixed bag. 2 agencies dropped the collection TransUnion, Equifax Dropped it , Experian did not , they replied that they analyzed the debt and it was deemed real. I still have 2 years left before the collection disappears it now up to 14k 5 years later. If you applying for a home loan in the next 7 years or any type of loan its best to payoff the debt, even if it appears in one credit bureau its done the damage it intended. And removing it its not 100% guaranteed.

 

[easyrider]

$8400 in 2018, Yes, they can, They did it to me. Its just a report they know they can't get a judgement but they can mess up your credit score for 7 years. I had already paid 3400 dollars and had not used it once, I contacted and let them know that they needed to sell the time share to someone else, that I had paid too much and was not using it. To take the profit they had already made without use. I think this can be open to fraud and to extortion, that was not my case but I can see how easily they can go after someone on a debt that is not enforceable in the USA. It should not be allowed. Basically they contract a USA based collection agency show the contracts and if the USA collection agency believes its legitimate they will try to basically extort you to pay because the contract is not enforceable in the USA. I contacted the credit agencies and pointed out the fact the contract was a Mexican contract and that it was not enforceable in the USA. The results was a mixed bag. 2 agencies dropped the collection TransUnion, Equifax Dropped it , Experian did not , they replied that they analyzed the debt and it was deemed real. I still have 2 years left before the collection disappears it now up to 14k 5 years later. If you applying for a home loan in the next 7 years or any type of loan its best to payoff the debt, even if it appears in one credit bureau its done the damage it intended. And removing it its not 100% guaranteed.

If it is financing through a Mexican company can't enforce the contract, report to a USA credit reporting agency or even get a Judgement. Often times the financing for a Mexican timeshare is through an American company like Barclays which is out of Delaware and is totally enforceable.

Bill

 

[wrk2travelalot]

If it is financing through a Mexican company can't enforce the contract, report to a USA credit reporting agency or even get a Judgement. Often times the financing for a Mexican timeshare is through an American company like Barclays which is out of Delaware and is totally enforceable.

Bill

So are medical bills--the Mexican concierge hospitals usually do the same thing..Mexican resorts have agreements to take you to one of these more expensive medical facilities. These hospital do all their billing and accounting of services either through an American or Canadian company-depending upon where you are from. The Mexican medical facilities through the billing agencies, American medical billing lawyers, and American bill collection agencies will initiate collection procedures against you. Make sure you know which medical facilities your government says are appropriate. These are usually on the US consulate website.

 

[easyrider]

So are medical bills--the Mexican concierge hospitals usually do the same thing..Mexican resorts have agreements to take you to one of these more expensive medical facilities. These hospital do all their billing and accounting of services either through an American or Canadian company-depending upon where you are from. The Mexican medical facilities through the billing agencies, American medical billing lawyers, and American bill collection agencies will initiate collection procedures against you. Make sure you know which medical facilities your government says are appropriate. These are usually on the US consulate website.

We always buy travel insurance when we go to Mexico. About 5 years ago I was looking at Mexican Medical facilities that had the medical apparatus and physicians that knew how to operate them. It seems like all of the hospitals require a credit card authorization. Even though I haven't needed to go to a Mexican Hospital, I do take a couple of credit cards just in case.

I haven't looked at the US consulate site so thank you for that info.

Bill

 

[SML123]

$8400 in 2018, Yes, they can, They did it to me. Its just a report they know they can't get a judgement but they can mess up your credit score for 7 years. I had already paid 3400 dollars and had not used it once, I contacted and let them know that they needed to sell the time share to someone else, that I had paid too much and was not using it. To take the profit they had already made without use. I think this can be open to fraud and to extortion, that was not my case but I can see how easily they can go after someone on a debt that is not enforceable in the USA. It should not be allowed. Basically they contract a USA based collection agency show the contracts and if the USA collection agency believes its legitimate they will try to basically extort you to pay because the contract is not enforceable in the USA. I contacted the credit agencies and pointed out the fact the contract was a Mexican contract and that it was not enforceable in the USA. The results was a mixed bag. 2 agencies dropped the collection TransUnion, Equifax Dropped it , Experian did not , they replied that they analyzed the debt and it was deemed real. I still have 2 years left before the collection disappears it now up to 14k 5 years later. If you applying for a home loan in the next 7 years or any type of loan its best to payoff the debt, even if it appears in one credit bureau its done the damage it intended. And removing it its not 100% guaranteed.

If you create accounts with Trans Union, Experian and Equifax, you can add NOTES to a negative item. Keep it short and to the point. Example: Mexican Timeshare Purchase Aug 2016. Membership not as presented. Forfeited $3400 down payment. I think using the word TIMESHARE alone spells out the entire picture to a lender who has pulled your credit.

 

[nanita]

Actually the agency acting on behalf of the Mexican resort (based in Arizona) attempted to collect from me sometimes as the resort and sometimes as a debt collector. It was very inconsistent and I knew they couldn't be both. That's when I questioned their legitimacy and just ignored them. I did a down payment in Mexico when I signed the contract but I didn't make any other payments and i never used my weeks. Also technically it's a membership not a timeshare.

Any way fast forward to today and the same agency I been getting bills from, MCS, reported my full debt to the credit bureau and it appeared as a derogatory mark on my credit.

I feel like I can fight this but I am not sure how. They most certainly can report you to credit bureaus as this one just did, but I don't see how it's valid.

If anyone has any advice it would be much appreciated