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What Happens If I Don T Pay Timeshare Maintenance Fees – History shows that most timeshare owners see maintenance fees increase year over year. For homeowners, this can cause a lot of stress as they wonder, “How much is it going to cost this year?”
A recent study of the timeshare industry found that 66% of owners who want to part with their timeshare properties are willing to do so because maintenance fee costs are rising faster than inflation and show no signs of slowing down. In 2005, the average weekly maintenance fee was $471 per year. Ten years later, in 2015, average maintenance costs had nearly doubled to $920 per year. That’s a staggering 95% increase in ten years (see chart below).
What Happens If I Don T Pay Timeshare Maintenance Fees
Unfortunately for timeshare owners, maintenance costs are also beyond their control. Even if they don’t agree with the set amount, they must pay. In most cases, this amount is typically determined by the resort association, which is governed by a board of directors and/or a management company. They determine fee amounts based on more than just station services; resort organizations use these fees to cover a variety of expenses beyond property maintenance and improvements, including budgets and payroll.
Avoiding Timeshare Scams
Timeshare owners are required to pay maintenance fees during the timeshare term, and these contracts are usually permanent. If for any reason you decide to stop paying maintenance fees and default on your timeshare obligations, your resort can (and likely will) initiate collection efforts. In addition to severely damaging your credit score, non-payment could result in a lawsuit if the resort developer decides to foreclose if possible.
Many timeshare owners don’t know where to start or even who to trust to help them close their ownership. At The Newton Group, we have successfully helped thousands of timeshare owners exit their timeshares for over a decade. We would be happy to discuss your situation with you and see how we can help.
If you’re ready to stop paying maintenance fees, special assessments, and taxes today, give us a call or fill out the form above and one of our consumer advisors will contact you.
Please note that our blog content is believed to be accurate at the time of publication, but conditions may change so offers may not apply, or content may no longer be up to date or accurate. If you have any questions about our services, please feel free to contact us. Starting to think your timeshare isn’t the best investment? Sorry, you’re right because timeshares are notoriously unprofitable. They cost too much upfront and require large loans that will cost you interest in the distant future. Even if you never live there, you’re forced to pay regular maintenance fees that can add up to more each year than you originally expected. And, sorry to break it to you, all the money you spend on your timeshare today (usually within 10-15 years) could be used in other investments. Finally, and perhaps more annoyingly: it’s not really a second home. You can only use a timeshare at certain times of the year and in certain locations, so hopefully you’ll like the location so you don’t have to flex with your vacation plans in future years.
How To Get Out Of A Timeshare?
Well, why not just walk away, get rid of the property, and never think about it again? Wait, as it can expose you to many financial, legal, and other problems. To help you prepare for your next step, here is a semi-exhaustive list of the consequences of not paying your timeshare fees. Remember them before you do something you might regret.
Let’s say you stop paying your timeshare and various fees. The first thing the management company will do is contact you to let you know you are overdue. They will contact you first by email and then by phone. If you decide to start making payments again, that’s great, but you may have to pay interest, late fees, and other late fees in addition to what you’re contractually obligated to pay. The company may set up a payment plan, loan deferral or similar arrangement at this stage based on your previous payment history. Some may even understand the difficult times you are going through and try to give you a break. But make no mistake: In the end, everyone insists on getting what they deserve.
After some time, the management company may decide to contact a collection agency. The agency can be independent or another division of the company. They’ll work harder to make you pay, and they’ll get tougher. You will receive a few phone calls and letters, and while they may still offer you ways to pay off your debt, you may not get the same offers as before. Additionally, and more importantly, your credit score will drop and your credit report will show that you have dealt with a debt collection agency. Even if you pay it all off now, your finances could take a big hit over the next seven years. If you’re older and don’t make as much money as you once did, the management company may not come to you, but that doesn’t mean your heirs won’t be forced to take over your share of the debt if you agree. Time vacation. They may have their names mentioned in the deed. Either way, leaving is never easy.
Let’s say the company doesn’t give you a pass. Now, they can take you to court where you can defend your case (claim the legal fees needed to hire an attorney, fill out paperwork, etc.). You may win or reach a settlement, but in the worst case scenario, a judge will go to the management company and award them a money judgment. Your wages may be garnished or levied from your bank account, causing your bank to freeze your account and pay the company out of available funds. Yes, this again can have a negative impact on your credit score.
How Do I Get Rid Of My Timeshare In A Pandemic?
If the management company ultimately cannot repossess your property, they may foreclose on it. Foreclosure means they can put the property up for auction to recoup their losses. But as a debtor, you are not out of the woods yet. If the company doesn’t make enough money from the auction to pay off your debt, it can seek a deficiency judgment. This means you are still responsible for paying the remaining debt until it is paid in full. Your credit score is really going down now, and it may even affect your chances of getting a mortgage in the future. You ask about the consequences of not paying your timeshare fees. Well, that’s it, it’s best to avoid them.
Yes, but obviously the safest way is to pay and never default. Of course, this doesn’t alleviate the hassle and debt associated with a timeshare and its fees, but at least you can avoid tarnishing your credit report and adding new debt. However, if you are determined to get rid of your timeshare, there are many ways and means to do so. You can certainly sell it, but timeshares are notoriously difficult to get rid of due to all their problems. Plus, while renting out the space might — and likely will — allow you to break even, you’re still giving up your vacation spot for the week. Some people are considering returning the timeshare to the management company, but this is unlikely. Sometimes companies are willing to pay a price to let customers go. You will need to hire an attorney or other advocate to conduct these negotiations.
You may also want to explore the possibility of using a timeshare cancellation service such as Preferred Cancellation Service. As stated on our FAQ page, we are not a resale, transfer, or donation company, but a consumer protection agency. When you hire us, our goal is to relieve you of your 12-month timeshare obligation. Please visit our website and consider all of the above factors when deciding how to proceed, and please contact us if you have any questions about our services. One of the most important parts of owning a timeshare is paying the annual maintenance fees. Timeshare maintenance fees cover scheduled maintenance of your timeshare resort and many other factors associated with vacation ownership. What if you can no longer afford those annual fees? Is your payment method not available? Let’s discuss what happens if you don’t pay your timeshare maintenance fees and what your alternatives are.
Before we answer what happens when you don’t pay timeshare maintenance fees, it’s important to understand what it is. Timeshare maintenance fees are fees that timeshare owners must pay.
Walking Away From Timeshare Maintenance Fees
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