Defaulting Mexican Timeshare

[LeslieDet]

Today we received a notice from Monterey Financial Services about the $2475.54 we owed to Villa del Arco and if we didn't pay, it would affect our credit report

Just FYI - Monterey Financial Services is a debt collection agency that has been in business for over 30 years. I realize that some of the advice you have received on TUG basically tells you not to worry, but be aware that if the debt collector is sending you a letter saying it could impact your credit report, then that is entirely possible. While the FDCPA protects you from harassment, etc., that doesn't mean that your credit won't be impacted. Debt collectors are prohibited from providing false information to a credit reporting agency, they aren't prevented from providing accurate information to a reporting agency.

 

[Mama Bear]

Thank you. We'll see what happens.

 

[easyrider]

Just FYI - I'd be careful about saying that once a consumer disputes the debt, that the collection agency must stop entirely, as certain communications are still allowed within that 30 day period. 15 U.S. Code section 1692g - Validation of debts.

Also, Debt collectors can report to credit agencies after contacting the consumer, but not prior to the collection demand. So, it won't appear on the credit report before hand, but it can appear after the demand. Under the FDCPA, the collection agencies cannot report false information about the debt (this is a link to the CA DOJ info re debt collectors). https://oag.ca.gov/consumers/general/debt-collectors

The topic is Mexican Timeshare debt meaning a loan through a Mexican company doing business only in Mexico. To further the topic, lets add how a Mexican company can enforce a Mexican loan in the USA. I'm interested in hearing your thoughts.

Bill

 

[easyrider]

Debt collectors are prohibited from providing false information to a credit reporting agency, they aren't prevented from providing accurate information to a reporting agency.

How can a credit collection agency in the USA use an International debt on an American to tarnish an American credit report without first getting a judgement in the USA on the International debt ? I'm thinking they can't get a judgement in the USA unless it's an American line of credit used to finance a Mexican product.

Bill

 

[LeslieDet]

How can a credit collection agency in the USA use an International debt on an American to tarnish an American credit report without first getting a judgement in the USA on the International debt ? I'm thinking they can't get a judgement in the USA unless it's an American line of credit used to finance a Mexican product.

Bill

Collection agencies buy debt all the time. Debt incurred outside of the USA can still be pursued in the USA. It would be typical for a collection agency to first pursue recovery if the original debt is from a country where that country and the USA have agreements/treaties in place to allow the cross-border collection, prior to filing suit. Of course, not all will file suit. When they do acquire the debt, the collection agency must comply with the FDCPA in pursuing recovery in the USA if it is consumer debt. And the contract under which the debt is incurred is also important to read and understand the provisions relating to breach.

Are you perhaps thinking about the Enforcement of Foreign Judgment Act? That is another way that debts turned into judgments incurred outside of the jurisdiction where the debtor resides can be enforced, but I suspect that is more typically used when it is non-consumer debt.

 

[LeslieDet]

The topic is Mexican Timeshare debt meaning a loan through a Mexican company doing business only in Mexico. To further the topic, lets add how a Mexican company can enforce a Mexican loan in the USA. I'm interested in hearing your thoughts.

Bill

BTW- the person I was responding to doesn't have a Mexican loan, she is being billed for unpaid MFs. I suspect that the MFs are billed in US dollars, not pesos. And there most likely is a written agreement in place between the Mexican ts company and the owner which probably has a collections sections regarding what happens upon default/non-payment. I have not seen it, have you? I simply suggest that she not rely upon the suggestion to ignore the demand since the demand states the unpaid debt could impact her credit. The FDCPA prohibits false and misleading statements, it doesn't prohibit reporting that debt exists.

 

[T_R_Oglodyte]

The Mexican loan is enforceable in Mexico. The only credit reporting agency that would be notified is Mexican. Other International credit reporting agencies would not be notified unless the owner of the Mexican debt was able to use the other countries court system to enforce the debt.

It depends on the debt. If it is a loan through an American lending institution, like a Barclays line of credit, then the loan is an American debt and is reportable and able to proceed to collection like any other American debt. If it is a line of credit through a Mexican company like a resort, the debt, whether loan or maintenance fee, is not reportable to credit agencies in the USA and can only be collected with the debtors cooperation.

Thanks for your answer Bill.
In my case, it is a Mexican “Loan” through the resort. Not US bank backed loan. Thats why I was surprised they want to send it to collections

The topic is Mexican Timeshare debt meaning a loan through a Mexican company doing business only in Mexico. To further the topic, lets add how a Mexican company can enforce a Mexican loan in the USA. I'm interested in hearing your thoughts.

And there most likely is a written agreement in place between the Mexican ts company and the owner which probably has a collections sections regarding what happens upon default/non-payment.

One thought. In our experience some Mexican timeshares operations have a US-based entity that is a US corporation, and when they sell to a US citizen the sale is conducted using the US company as their contracting entity. I have seen fine print in contracts that says that the agreement is enforceable in the US.

I suspect that they may also use the US entity as the biller and receiver of maintenance fees.

 

[easyrider]

Collection agencies buy debt all the time. Debt incurred outside of the USA can still be pursued in the USA. It would be typical for a collection agency to first pursue recovery if the original debt is from a country where that country and the USA have agreements/treaties in place to allow the cross-border collection, prior to filing suit. Of course, not all will file suit. When they do acquire the debt, the collection agency must comply with the FDCPA in pursuing recovery in the USA if it is consumer debt. And the contract under which the debt is incurred is also important to read and understand the provisions relating to breach.

Are you perhaps thinking about the Enforcement of Foreign Judgment Act? That is another way that debts turned into judgments incurred outside of the jurisdiction where the debtor resides can be enforced, but I suspect that is more typically used when it is non-consumer debt.

The process should be that the Mexican company acquires a judgement from a Mexican court to prove the debt. Once authenticated, the foreign debt judgement is allowable in the US courts through State jurisdiction but it would be up to a court to decide to even look at it. If the judgement is from a Mexican Court in favor of a Mexican Company it would probably be for something larger than a small consumer debt that probably wouldn't be paid even with a judgement in the State Court.

The two things that keep these out of court is the judgement is a foreign judgement for an amount of money not worth pursuing and the judgement falls under State Law where anti deficiency laws mitigate the amount that can be awarded.

What is usual is these debts are legally sold to debt collectors whose objective is to get the debtor to sign a recourse loan in the debtors own State. Once they get the new loan established, they can use the Court system to go after assets if the loan defaults.

If a person doesn't cooperate with the collection company on a foreign debt there isn't much a collector can do. Usually, they have bought an un-authenticated foreign debt. This foreign debt has to be authenticated before proceeding to State Courts for judgement. Even if the foreign debt is authenticated, it is considered a non-recourse loan in most States.

Bill

 

[LeslieDet]

The process should be that the Mexican company acquires a judgement from a Mexican court to prove the debt. Once authenticated, the foreign debt judgement is allowable in the US courts through State jurisdiction but it would be up to a court to decide to even look at it.

That happens when the process being pursued is pursuant to the statutory Enforcement of Foreign Judgment Act. That Act applies when there is actually a judgment entered in another jurisdiction. To enforce it in the state where the defendant resides, the debt and court process must comply with the laws of the jurisdiction where it is trying to be enforced. For example, perhaps an illusory guarantee can be enforced in another state or country, but in CA it cannot. So that is a valid defense to the underlying claim.

I'm not sure why you are relying upon anti-deficiency laws. In CA for example Civil Code section 5310(a)(7) discusses available HOA remedies and lien rights; the CC&Rs of the association are an import part of the discussion. It simply seems to me that given the variables in play to state unequivocally that the collection of unpaid MFs from a Mexican ts can be ignored is risky.

BTW - My understanding is that in the past 20+ years with various international agreements and treaties that have been put into place, it is easier for cross-border collections, both from the USA into Mexico and Mexico into the USA, that do not first require a court judgment be in place. IDK if that is applying in the instance of collecting MFs on a Mexican ts, but if it does apply, it would be a shame for someone to come here and be told to simply ignore the demand, and then have it hit that person's credit report.

 

[TUGBrian]

think everyone can agree it "can".... it just rarely if ever "is"... The chance of it is extremely low, but never zero!

especially when discussing just defaulting on maintenance fees...vs a loan balance.

 

[Mike03]

Wow! Thanks for all the replies and the information.
I will probably have news about my case this week. So I will keep you guys posted.
However, I think it is a very important topic to clear. People should know what could happen, mostly because after you buy a timeshare, it is basically worthless (learned that the hard way).
So then you have a “mortgage” that you can’t sell? Or foreclosure? Then if you have a health problem or a change in your life-job, you can’t do anything? They just send you to collections, then to court and they can go after your salary or your assets?
For what you guys have said, it is a probability, a small one, but still a probability (a very crazy one).
My thoughts are: It is just a membership in the end!!!

 

[easyrider]

That happens when the process being pursued is pursuant to the statutory Enforcement of Foreign Judgment Act. That Act applies when there is actually a judgment entered in another jurisdiction. To enforce it in the state where the defendant resides, the debt and court process must comply with the laws of the jurisdiction where it is trying to be enforced. For example, perhaps an illusory guarantee can be enforced in another state or country, but in CA it cannot. So that is a valid defense to the underlying claim.

I'm not sure why you are relying upon anti-deficiency laws. In CA for example Civil Code section 5310(a)(7) discusses available HOA remedies and lien rights; the CC&Rs of the association are an import part of the discussion. It simply seems to me that given the variables in play to state unequivocally that the collection of unpaid MFs from a Mexican ts can be ignored is risky.

BTW - My understanding is that in the past 20+ years with various international agreements and treaties that have been put into place, it is easier for cross-border collections, both from the USA into Mexico and Mexico into the USA, that do not first require a court judgment be in place. IDK if that is applying in the instance of collecting MFs on a Mexican ts, but if it does apply, it would be a shame for someone to come here and be told to simply ignore the demand, and then have it hit that person's credit report.

After reading your post I looked at how some Mexican owned timeshare membership companies collect their loan and maintenance fee's. Many are using companies in the USA to facilitate payments.Pueblo Bonito's affiliation is Concord Servicing. Villa Group's affiliation is Resortcom. Vidanta's affiliation is Billhighway. All of these companies have the ability to report delinquent payments and defaults to a Credit Rating Agency.

So yes, the fact is that non-payment to some Mexican owned timeshare companies can show up on a credit report.

An American company would likely be required to go through the process of obtaining a judgement in the contracts country of origin and find a Court to enforce that judgement in the USA. If a person were to defend them self in Court, they could allege many things or possibly request a jury trial . No Mexican company is going to go through all of this to collect missed maintenance fee's or a default on a small loan where all they are awarded might be their rtu, imo.

Reporting to credit rating agency is risky for Mexican companies as well. If they upset the wrong person a class action suit could be levied against the Mexican Company. This has happened in the past with Groupo Maya, Pueblo Bonito and the Villa Group and is probably the main reason large Mexican companies use American companies for financial services. It gives Mexican companies a layer of protection from lawsuits, imo.

If anyone has had a Court action against them for defaulting on a Mexican owned timeshare property it would be interesting to hear the story.

Bill

 

[TUGBrian]

also with no deeds involved for mexican timeshares, foreclosure is not on the table as it doesnt even apply.

 

[Mike03]

Hello everyone!
Just a little update over here. After speaking with the Tafer personnel directly (Not the ones from ResortCom), I got to an agreement with them, and they recognized the amount I had paid so far (Almost 40k of 70 total). They decreased my total points to just the ones that I had paid so far, discarded any late fees, and made a whole new membership. My yearly maintenance went down and now I don't have any extra monthly payment.
I would suggest to anyone being contacted by ResortCom, to contact their hotel directly. ResortCom is just another company that serves a lot of hotels, and they are in charge of collecting money and keeping the accountability side of them.
When I contacted ResortCom, they were very rude, and they didn't provide any help. Yes, the Tafer people were not happy that I mentioned the word "lawyer" to the ResortCom staff, however, I don't know what they pretend if the first thing that the ResortCom people told me was that it was not possible to cancel the contract, that I have to pay it in full, otherwise I will be sent to collection.
On my side, I'm happy with the outcome, since my yearly maintenance is around $1000 dls, and the year that I don't want to use it, I can easily rent 2-4 weeks a year (depending on the season) in Cancún for over that, and I will have no extra costs.
For anyone reading this, please, make sure to know, read, and understand what you are buying-signing for, even before taking a plane to a cheap weekend to Mexico or anywhere. This was a very stressful January-February for me.

 

[shameX]

Thank you all for your thoughts...I'm not sure what route we will take yet. I am thinking that since it is only about $2500, just pay it and get over it. But the problem still remains...if we pay it, does that stop MF payments from here on, or will they keep billing us? I don't ever want to go to Villa del Arco again!!

Hi Mama Bear and Thread, I also received a letter from Monterey Collections recently. This is for a past-due default on a Tafer membership out of PV. No financing was done in the US and the MX loan does not show up on my credit debt. I tried to negotiate with Tafer back in 2022 but no luck. They reached out a few months ago with a last-ditch effort to re-engage by offering a "golden ticket" but I didn't respond. I don't trust them. Yes, I take responsibility for being caught up in the moment and handing them a cc and a lump sum of money (trust something I'm very embarrassed by). I'm curious what actions you took if any? Like you, I feel anxious about this but also relieved there are others out there like this community that exist to help support and impart knowledge. If anyone else out there has thoughts or recommendations please let me know. My current plan is to send Monterey a debt verification request via certified mail and go from there. I have an 800+ credit score and I don't want to be tarnished because of this.

 

[shameX]

After reading your post I looked at how some Mexican owned timeshare membership companies collect their loan and maintenance fee's. Many are using companies in the USA to facilitate payments.Pueblo Bonito's affiliation is Concord Servicing. Villa Group's affiliation is Resortcom. Vidanta's affiliation is Billhighway. All of these companies have the ability to report delinquent payments and defaults to a Credit Rating Agency.

So yes, the fact is that non-payment to some Mexican owned timeshare companies can show up on a credit report.

An American company would likely be required to go through the process of obtaining a judgement in the contracts country of origin and find a Court to enforce that judgement in the USA. If a person were to defend them self in Court, they could allege many things or possibly request a jury trial . No Mexican company is going to go through all of this to collect missed maintenance fee's or a default on a small loan where all they are awarded might be their rtu, imo.

Reporting to credit rating agency is risky for Mexican companies as well. If they upset the wrong person a class action suit could be levied against the Mexican Company. This has happened in the past with Groupo Maya, Pueblo Bonito and the Villa Group and is probably the main reason large Mexican companies use American companies for financial services. It gives Mexican companies a layer of protection from lawsuits, imo.

If anyone has had a Court action against them for defaulting on a Mexican owned timeshare property it would be interesting to hear the story.

Bill

hi bill - i Just found this court case: https://casetext.com/case/alausa-v-monterey-fin-servs

what do you make of it all.

 

[easyrider]

hi bill - i Just found this court case: https://casetext.com/case/alausa-v-monterey-fin-servs

what do you make of it all.

The plaintiff's word is no better than the defendants word meaning the plaintiff's should have used a letter and email to show they had canceled this in the required rescission period. Without any proof, the plaintiff's statement is conjecture. This is why using email works well regarding a rescission. Email provides a timestamp.

A majority of the big Mexican developer loans are lines of credit that have ties to the USA. Barclay offers Americans lines of credit to purchase timeshares in Mexico. Basically, the debt is paid off to the developer and is owned by an American company. The loan becomes different in that it follows the laws of the USA and is similar to any consumer line of credit offered in the USA. A persons social security number isn't a requirement for a loan. The Mexican developer can claim they have their own financing and have a buyer sign what looks like a Mexican loan when in fact it is an unsecured line of credit through an American institution. Same thing for mf's. Most of the big Mexican developers are setting up payments in the USA which gives them the ability to pursue collection efforts in the USA.

I think your link is interesting. It does show that collection efforts must be done in a certain way. Thanks for posting it.

Bill

 

[Dave is here]

I have a couple of things that work for me on this type of stuff.
First, I like to see sites like this to see how others have done this and get ideas that could work.

​

I also joined a legal service (that charges about $25 monthly) and has really decent attorney's.​

That way I don't have to try to come up with what makes sense to me, because the law does not work on what we think or even how it should work.
That's the kind of advantage lawyers have made for themselves. So, I can either complain about, fix it, or work with it (I'm lying, I can't really fix it).
It has more than paid for itself so many times (and I'm rarely involved in legal situations), sometimes just knowing what my rights are is all I need.
I'm not interested in sharing the company or promoting it, there are a few companies that offer this, and you can always cancel anytime (at least with mine).

The other thing I did is hire a credit repair company. Yes, I could do a lot of it myself, but I didn't and really wouldn't. So, in the worst case scenario, I would be fine.​

They have even legally removed a bankruptcy from a friends credit after it being only their report for 3 years (of the 7 or 10?). Again, I'm not here to promote them. Legitimate credit repair companies are pretty rare, so expect to do some research. I'm also aware of how many people will want to tell me that they are all scams, It worked very well for me so . . .

So, my main advice would be, do some research, but do not have any contact with anyone until you actually talk to a qualified attorney.​

The cost you save by winging it, will most likely way exceed the cost of advice, which with some plans could only cost you less than $50.​

​

Note: I run my own construction business and do not promote or have any connection to any of the companies I have mentioned above and am not here to refer them.

 

[Wjsimacek]

Hello everyone!
Just a little update over here. After speaking with the Tafer personnel directly (Not the ones from ResortCom), I got to an agreement with them, and they recognized the amount I had paid so far (Almost 40k of 70 total). They decreased my total points to just the ones that I had paid so far, discarded any late fees, and made a whole new membership. My yearly maintenance went down and now I don't have any extra monthly payment.
I would suggest to anyone being contacted by ResortCom, to contact their hotel directly. ResortCom is just another company that serves a lot of hotels, and they are in charge of collecting money and keeping the accountability side of them.
When I contacted ResortCom, they were very rude, and they didn't provide any help. Yes, the Tafer people were not happy that I mentioned the word "lawyer" to the ResortCom staff, however, I don't know what they pretend if the first thing that the ResortCom people told me was that it was not possible to cancel the contract, that I have to pay it in full, otherwise I will be sent to collection.
On my side, I'm happy with the outcome, since my yearly maintenance is around $1000 dls, and the year that I don't want to use it, I can easily rent 2-4 weeks a year (depending on the season) in Cancún for over that, and I will have no extra costs.
For anyone reading this, please, make sure to know, read, and understand what you are buying-signing for, even before taking a plane to a cheap weekend to Mexico or anywhere. This was a very stressful January-February for me.

I think I just spoke to Tafer directly today, to attempt to do the same kind of restructuring you did. Through 12 2123 I’ve paid $16,000 on a $34,000 principal. The individual I talk to said there’s no way they will do any kind of restructuring, and my only option is to forfeit And pay the $16,000 balance. To quote Mr. Rogers “ can you say bastard?”

I guess I’ll have to check and see if there’s some other kind of option and maybe hire somebody legally. Looks like the resale value on tug is only about $4500.

Anyone have any ideas?

 

[easyrider]

Hello everyone!
Just a little update over here. After speaking with the Tafer personnel directly (Not the ones from ResortCom), I got to an agreement with them, and they recognized the amount I had paid so far (Almost 40k of 70 total). They decreased my total points to just the ones that I had paid so far, discarded any late fees, and made a whole new membership. My yearly maintenance went down and now I don't have any extra monthly payment.
I would suggest to anyone being contacted by ResortCom, to contact their hotel directly. ResortCom is just another company that serves a lot of hotels, and they are in charge of collecting money and keeping the accountability side of them.
When I contacted ResortCom, they were very rude, and they didn't provide any help. Yes, the Tafer people were not happy that I mentioned the word "lawyer" to the ResortCom staff, however, I don't know what they pretend if the first thing that the ResortCom people told me was that it was not possible to cancel the contract, that I have to pay it in full, otherwise I will be sent to collection.
On my side, I'm happy with the outcome, since my yearly maintenance is around $1000 dls, and the year that I don't want to use it, I can easily rent 2-4 weeks a year (depending on the season) in Cancún for over that, and I will have no extra costs.
For anyone reading this, please, make sure to know, read, and understand what you are buying-signing for, even before taking a plane to a cheap weekend to Mexico or anywhere. This was a very stressful January-February for me.

Was this financed through a Mexican bank or Tafer directly ? Could you elaborate on the financing a bit ?

Thanks

Bill

 

[Wjsimacek]

Hello everyone!
Just a little update over here. After speaking with the Tafer personnel directly (Not the ones from ResortCom), I got to an agreement with them, and they recognized the amount I had paid so far (Almost 40k of 70 total). They decreased my total points to just the ones that I had paid so far, discarded any late fees, and made a whole new membership. My yearly maintenance went down and now I don't have any extra monthly payment.
I would suggest to anyone being contacted by ResortCom, to contact their hotel directly. ResortCom is just another company that serves a lot of hotels, and they are in charge of collecting money and keeping the accountability side of them.
When I contacted ResortCom, they were very rude, and they didn't provide any help. Yes, the Tafer people were not happy that I mentioned the word "lawyer" to the ResortCom staff, however, I don't know what they pretend if the first thing that the ResortCom people told me was that it was not possible to cancel the contract, that I have to pay it in full, otherwise I will be sent to collection.
On my side, I'm happy with the outcome, since my yearly maintenance is around $1000 dls, and the year that I don't want to use it, I can easily rent 2-4 weeks a year (depending on the season) in Cancún for over that, and I will have no extra costs.
For anyone reading this, please, make sure to know, read, and understand what you are buying-signing for, even before taking a plane to a cheap weekend to Mexico or anywhere. This was a very stressful January-February for me.

I finally looked up the Tafer number, directly on the web: 877–7 22–4592. I asked about refinancing, and found out the term, for it is downgrade, and I was able to get Patricia to submit a ticket for me to the original resort, downgrading from 2808 points to about 1500 which will reflect the amount I’ve paid on the principal so far. It sounds like I’ll get an update on the ticket in 5 to 7 business days you were right on the previous matter , the first number I had I think was actually resort.com, AAA said there was no way to get out of the contract but to walk away and still pay off the total $16,000 balance. A downgrade sounds like the way to go if I can get it done . Wish me luck.

 

[Wjsimacek]

AAA should have said Resort.com

 

[md_ace]

It depends on the debt. If it is a loan through an American lending institution, like a Barclays line of credit, then the loan is an American debt and is reportable and able to proceed to collection like any other American debt. If it is a line of credit through a Mexican company like a resort, the debt, whether loan or maintenance fee, is not reportable to credit agencies in the USA and can only be collected with the debtors cooperation. A collection agency can buy the debt and try to negotiate a settlement. If the settlement is signed by the debtor , the debt becomes an American debt.

Bill

I have a somewhat similar case with the Krystal Belair (which seemed to have acquired Playa del Sol Grand about 14 years ago). I bought with PDS originally in 2004 and then upgraded in 2007. We paid off the full balance within 3 months and never paid a MF unless we used the weeks. Around 2011 we received a "special assessment" or "extraordinary bill" for improvements to the resort. We paid it without question but have never returned to the resort for about 14 years when it was still PDSG. Now we are receiving another "special assessment" bill (have been receiving it since late 2019) from Belair resort and have not paid it. Lately I've started receiving emails from this resort along with the monthly bill and the last one states that my credit could be at risk. We owe nothing in regards to financing or MF and have no intention of paying this "special assessment" since we feel that doing so will only encourage them continue billing us whenever they want. What are the chances that I could get sent to collections since I never signed anything with Belair and the original contract states that we are bound by the laws of Jalisco, Mexico even though the PDSG is located in Bucerias, Nayarit in Mexico? They state that cancelling the contract is not an option.

 

[easyrider]

I have a somewhat similar case with the Krystal Belair (which seemed to have acquired Playa del Sol Grand about 14 years ago). I bought with PDS originally in 2004 and then upgraded in 2007. We paid off the full balance within 3 months and never paid a MF unless we used the weeks. Around 2011 we received a "special assessment" or "extraordinary bill" for improvements to the resort. We paid it without question but have never returned to the resort for about 14 years when it was still PDSG. Now we are receiving another "special assessment" bill (have been receiving it since late 2019) from Belair resort and have not paid it. Lately I've started receiving emails from this resort along with the monthly bill and the last one states that my credit could be at risk. We owe nothing in regards to financing or MF and have no intention of paying this "special assessment" since we feel that doing so will only encourage them continue billing us whenever they want. What are the chances that I could get sent to collections since I never signed anything with Belair and the original contract states that we are bound by the laws of Jalisco, Mexico even though the PDSG is located in Bucerias, Nayarit in Mexico? They state that cancelling the contract is not an option.

I don't know what they will do but the worst case scenario might be they eventually ding your credit score is what I think.

Bill