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

You jumped at the chance when your in-laws offered you their time share because they never use it anymore (or so they said). In fact, it really was a happy occasion until you realized you still needed to pay on it. You might wish you could turn back the hands of “time share” and refuse this gift, but if the time share is now in your name, the payment responsibilities belong to you. You cannot simply ignore them without paying a price.

Understanding the Deal

In addition to the initial purchase price of a time share, you need to pay maintenance fees that could range from $100 to more than $1,000 a year. Furthermore, those fees have a way of going up every year. If that is not in your budget, you could try to sell the time share. Unfortunately, that is unlikely to happen. The timeshare market at the time of publication is a seller’s market; there are no buyers, according to consumer expert Clark Howard. It is even a problem to donate your time share because most charities cannot or don’t want to take on this burden. Even worse, scam companies are out there ready to take your money. Deceptive companies promise they’ll find a buyer for you if you pay in advance, but all these places do is take your money. If a company tells you it can sell your time share for you, be skeptical, and surely never hand over any money in advance. Ask the company to mail you some information and to provide you with some references. Also, check whether its salespeople are licensed to sell real estate in the state in which your time share is located.

Collections and Foreclosure

The time share company will not let you get away with stiffing it. If you don’t pay the maintenance and any other required fees, it can report your delinquency to the credit bureaus, and it can send your account to collections. The time share company can also foreclose if you stop paying the maintenance fees, even if the unit is paid for. This will cause your credit score to tank, and you might need to pay penalties on top of the regular fees to avoid being sued. If the time share does go to foreclosure, the annual maintenance fees will end but you're still on the hook if the unit is not paid for.

Try a Settlement

By now, you've probably thought about turning the time share over to the company. Forget about that option -- the company doesn’t want the time share as much as it wants the fees they're expecting from you. Your next best move is to work out a settlement where you pay the time share company to take the unit off your hands. That way, you are done with the annual fees. If the time share company does not accept the offer, you might want to try your luck at renting out your week with the time share. That's one way you can cover the cost of fees.

Legal Help

You will want to get out from the never-ending maintenance fees that keep increasing before you succumb to foreclosure. That means you'll need to hire a lawyer to initiate a deed-in-lieu of foreclosure. The result is the same as a foreclosure in that the time share company will take back ownership of the unit, but a deed-in-lieu won’t drop your credit score as much as a foreclosure would.

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