What are the consequences of defaulting on timeshare payments?
This is a question you might see posted on various forums and timeshare complaint websites. Sometimes it is posted by genuine customers who are starting to have financial difficulties, but other times it has been posted by cancellation scammers looking to drum up business for their fraudulent services. Here is all you need to know about the consequences of defaulting on timeshare payments.
Consequences of defaulting on timeshare payments
If you cannot make your timeshare repayments, either on the loan or your maintenance fees, the best thing you can do is arm yourself with an understanding of what will happen if you decide on defaulting on timeshare payments entirely. Consider your options, review your finances, and weigh up the risks associated with defaulting; consider the legal ramifications and potential damage to your credit score.
Here’s the truth about what will happen if you default on your timeshare payments and fees …
Defaulting on timeshare payments in general
The consequences of defaulting on any of your timeshare payments depends on your own situation and on a variety of factors including how much of your loan you have left to pay. If you are behind on maintenance fees, for example, it may be very easy for you to get back on track once your finances improve, but if you fall behind on your actual loan it may be very difficult.
Defaulting on timeshare maintenance fees
When it comes to timeshare maintenance fees, every company has its own rules, but most will have delinquency fees for missed payments, and interest added monthly or daily should you fall behind. Furthermore, you will need to be up to date with your payments if you expect to use your timeshare at all. If you do fall behind, and seek to bring everything up to date it is likely that there will also be a reinstatement fee. Eventually, if you show no interest in meeting your responsibilities, your debt will be sold to a collection company or agency.
Defaulting on your timeshare loan repayments
Defaulting on your timeshare loan payments will result in more severe consequences more quickly. Timeshare ownership works the same way as all other real estate purchases; if you do not keep making your re-payments foreclosure and repossession are real possibilities. Likewise, if you used your credit card to buy the property you will have to keep up with those repayments too. If you fail to meet your responsibilities your debt is likely to be sold to a debt collection agency (and they are much less friendly than the Timeshare companies).
Debt Collection Agencies when defaulting on timeshare payments
If your debt is passed over or sold to a collection agency your credit rating will immediately take a hit and you will face being sued. You might even be reported to the Internal Revenue Service (which will make future investments tricky), and you will have to prepare yourself for the harassment to come.
Your credit rating will be affected by defaulting on timeshare payments
If you default on your timeshare payments this will have an effect upon your credit rating pretty quickly, unless you rectify the situation with stunning speed and get back on track with your payment. As a result getting credit in the future may be hard.
Beware timeshare cancellation scams
Cancellation scams often encourage people to default on timeshare payments, claiming that they can help you. Cancellation scammers seek to make money from people by playing on their panic. They will try to convince you that there is a way out which is quick and easy, and that is just not the case. There is no magic solution; these people will leave you with a mountain of debt and false hopes.
So, as you can see there’s no sauntering into the sunset if you stop paying your timeshare; just as there would be serious repercussions if you defaulted on your mortgage, so too will failing to pay for your timeshare have consequences.