Have you asked yourself the question, “What Happens if I Default on Timeshare Payments?” Some people are curious to know what consequences they will face if they default on their timeshare commitment. Investing in a timeshare membership is similar to a real estate purchase that involves a mortgage. Likewise, there are serious repercussions if you do not pay your payments as promised. Regardless of the situation that causes a timeshare member to consider not paying, it is wise to make a smart decision. You don’t want to deal with long term consequences or have your good credit score affected by not paying. Some owners have even become victims of timeshare scammers who claimed they could help them stop paying legally. To stay safe and make wise financial decisions, read the article below. It shares important information about what timeshare owners can expect if they default on timeshare payments.
What Happens if I Default on Timeshare Payments?
To start with, it is important to recognize that timeshare ownership legally binds you to make regular payments. Despite the reasons that occur that may cause an owner to have difficulty making payments, it is best to stay on top of payments as promised. There are many downsides if you break your contractual responsibility and default. Before that happens, make sure you understand the risks that will occur that can cause you serious problems now and well into the future, too. For example, your credit score will be adversely affected if you stop paying. That could cause you to have trouble obtaining loans or mortgages in the future. Plus, legal action may be taken against you if you stop paying. Before you make a costly mistake, step back and analyse why you are considering defaulting on your timeshare payment responsibilities. There is likely a way to organize your finances and get back on track before you default. In addition, if you stop paying your timeshare payments, you will lose all rights to use your vacation timeshare units and the incredible amenities that you love so much.
Maintenance fees are also required to be paid. If they are not paid, you will be considered as defaulting on your timeshare responsibilities. All timeshare companies require maintenance dues from their members. If you stop paying, you will have delinquent fees and interest fees added to your account in addition to the regular dues. In order to confirm how your timeshare provider works, check your membership contract for details. Remember, maintenance fees need to be up to date in order to use your timeshare unit. Once a member stops paying their timeshare maintenance fees, they lose rights to use the timeshare unit. Plus, you will most likely be required to pay a reinstatement fee if you default. Even more risky is that your existing provider can sell your debt to a collection agency if they believe you have no intention to pay your dues.
Face Potential Foreclosure
In addition to fees from your provider, even foreclosure is possible if you just stop paying your timeshare payments. To start with, your existing provider will usually send you a written warning if you don’t make your required payments. If you don’t respond, they will then try to contact you by emails and phone calls as well. If a timeshare owner ignores the communications and does not pay their payments as promised, the timeshare provider can file for foreclosure proceedings to start. Even your possessions could have a claim filed against them. Lastly, if you took out a loan or paid your timeshare membership with a credit card, you are still legally required to pay payments as well as any late fees or interests that accrues, too.
Credit Score Will be Negatively Affected
Credit scores are very important. If you need to take out a loan to buy a car, house or furniture, your credit score will be considered. If you default on your timeshare payments, your timeshare debt will be sold to a collection agency. Collection agencies will share your information with credit score reporting companies and your score will be negatively affected. Remember, your credit score is always checked when you purchase any large items on credit. You will likely be denied a loan if you have a bad score because you did not stay current with your timeshare payments. In fact, the collection agency can even sue you which will drastically affect your credit score even more. Plus, credit collectors are very persistent. No one wants to face public humiliation if a collector comes to visit you at home or work.
Avoid Cancellation Scams
Lastly, some timeshare owners have become victims of timeshare cancellation scams. Cancellation scams occur when fraudulent companies promise owners they can cancel your timeshare for you. However, no one can cancel a timeshare agreement after the rescission period has passed which is only a few days or weeks after the membership construct is signed. Timeshare cancellation scam companies attempt to confuse unsuspecting owners and cause even more financial stress. They often charge owners an upfront fee, and quickly disappear without providing any service since timeshare cancellation is not possible. If you want more clarification about your specific membership, always contact your existing provider directly. Never involve any third party companies that could be scammers.
There are many serious consequences to consider if you are asking yourself the question, “What happens if I default on timeshare payments?” We hope this article helped show you the importance of staying current on your dues so you can enjoy amazing vacations that your family deserves.