What Happens to People If They Stop Paying on a Time Share?

What Happens to People If They Stop Paying on a Time Share?

What Happens to People If They Stop Paying on a Time Share?

Vacationers who frequent the exact same area annually may gain from buying a timeshare. A timeshare gives you exclusive right to utilize a parcel of property for the identical week annually. Like any type of property, then you may get a loan to purchase your timeshare to finance the total cost into monthly payments. When you quit paying in your own timeshare, the lender or owner attempts to collect the money owed. The precise consequence is based upon the type of timeshare you purchase.

Types of Timeshares

Two kinds of timeshares are available: right-to-use timeshares and deeded timeshares. Both timeshare types give you rights to utilize the property for a specific period of time throughout the year. Right-to-use timeshares just rent out a particular week for use. Deeded timeshares give property rights to the operator.

Collection Attempts

Right-to-use timeshares follow similar group procedures as other lines of credit. The timeshare management company attempts to contact you by telephone and by email for several months. After failing to rectify the underpayment, the management company sends your account to collection. The third party collection agency attempts to collect on the debt through aggressive use of the telephone and email contact. Eventually, the management company may pursue a civil action by taking you to court. If the management company wins, a conclusion is issued by the court ordering one to pay. The business may garnish your salary or levy your bank account to acquire the last due balance paid.


You’re part owner of a deeded timeshare. In order to collect from you, the lender must initiate foreclosure proceedings. After the lender files for foreclosure, then you get 90 days to pay the past due bill. The lender files for a Notice of Sale to auction off your timeshare rights. After the auction, then you no longer have rights to this property.


Pursuing collection efforts from the account drastically cuts your credit score. You may experience difficulty in receiving future credit. You may see an increase in your insurance premiums and a slashing of your present credit lines. Foreclosure results in an additional tax liability for the lack balance. You have to claim the remaining balance to the timeshare as taxable income in your tax return. Future lenders may deny your application for credit or another mortgage loan for up to seven years until the foreclosure leaves your credit report.

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