Millions of people are seeking a way out of their timeshare. When timeshare exit solutions are hard to come by, many people consider abandoning their timeshares. However, is this really a good idea?
If you are one of the people who regret their purchase of a timeshare, you may have considered the consequences of walking away from it. In the current pandemic, coupled with the skyrocketing maintenance fees, owning a timeshare seems more and more impractical.
Maybe you have tried selling it and you cannot find a buyer. Maybe you have tried negotiating with the resort developer, and they just won’t work with you. Sometimes, when these things fail, it can feel like there is no way out of a timeshare agreement.
Can you abandon your timeshare, leaving the fees and obligations behind you?
Refusing to Pay Timeshare Fees
When you feel you’ve exhausted all your other options, it might feel like refusing to pay the maintenance fees is your only choice. Before you decide to ignore the incoming bills, it’s important to take note of the potential consequences. These consequences include:
Negative Impact on Your Credit Score
If you choose to not pay your timeshare fees, your credit may be negatively impacted.
A low credit score will cause a variety of issues for you in the future. Dings to your credit will make it difficult for you to get a loan, which consequently makes it harder to obtain a home or a car in the future. If someone with a poor credit score does manage to get a loan, they will certainly have a higher interest rate. This means that you will be paying much more than you would if you had a good credit score.
However, some people may be in a position where they are not planning on making any big purchases in the oncoming years. If this is the case, a low credit score is frankly not a huge deal.
However, there are other consequences to failing to pay your timeshare maintenance fees.
You Will Lose Access to Your Timeshare
This one is a little more obvious, but if you stop paying your timeshare fees, the resort will no longer allow you to use the timeshare. You also cannot use any of the amenities associated with the resort.
Additionally, you will not be able to participate in the resort’s exchange program either.
You Will Be Contacted For Payment
Much like any other bill, if you stop paying your timeshare fees, the resort will make attempts to collect payment from you.
This typically starts with calls, emails, or letters from your resort directly.
After they fail to collect directly for a certain period of time, they will likely give the case over to a collection agency. A huge downfall with collection agencies is that they will also collect a fee from you for their service. A collection company contacting you is an even bigger ding on your credit score.
Either way, you will be receiving a lot of unwanted phone calls and letters demanding payment.
You May Be Sued by the Timeshare Resort
Some developers have resorted to suing owners who abandon their timeshares.
If a resort chooses to sue you over failing to pay your maintenance fees, it’ll be a huge process. You will have lawyer fees and court costs, which will certainly end up totalling more than your maintenance fees.
Many people make the mistake of thinking that their timeshare resort doesn’t care enough to come after them in court. However, it’s important to think about how much an individual’s maintenance fees are worth to a resort.
On average, a timeshare owner pays maintenance fees for thirty to forty years. Maintenance fees typically total around $1,200 per year. If you multiply 35 by 1,2000, you are looking at $42,000.
Not to mention, a lot of timeshare contracts include a perpetuity clause. This means that your heirs may be required to take on the timeshare, and all of the associated fees, after your death.
That is a lot of lost revenue for the resort if a timeshare owner chooses to stop paying their fees.
Other Options in Getting Rid of Your Timeshare
Abandoning your timeshare is not the most wise decision. If you fail to pay your maintenance fees, it will lead to a lot of legal and financial hardship down the line.
Luckily, there are a handful of other options in getting rid of an unwanted timeshare.
Selling Your Timeshare
If your timeshare is already paid off in full, you should try to sell it.
The resale market for timeshares is diminishing, and selling a timeshare can be very time consuming. That being said, it is a better option than abandoning your timeshare because your credit won’t be negatively affected.
There are a few websites on which you can list your timeshare for people who are seeking them out to purchase:
- Craigslist – you can list your timeshare without paying a listing cost.
- Ebay – you can pay a $50 fee to list your timeshare.
- MyResortNetwork.com – you can list your timeshare for about $39.95.
- Tug2.com – you can pay an annual membership fee of $15 to maintain your listing.
- Redweek.com – listing cost can range between $59.95 and $125.
Many people have a very hard time finding a buyer for their timeshares. This is due to an increasing awareness of the cons of timeshare ownership, such as the hefty fees.
Some people list their timeshares for as low as $1, and still are unable to find a buyer after years on the market. Others have even failed attempting to give their timeshares away for free.
If you do manage to find a buyer for your timeshare, you may still need to pay additional fees. Most resorts impose a transfer fee to their timeshare owners who are selling to another owner. These fees will likely cost you about $500.
It is also worth noting that if you owe a mortgage on your timeshare, your chances of selling are very low.
Timeshare Exit Companies
After failing to sell a timeshare, many timeshare owners resort to working with a timeshare exit company.
If you choose to work with a timeshare exit company, be very cautious. Many timeshare exit companies are fraudulent. The fraudulent exit companies will often require high upfront payments and lack transparency in consultations, which are two huge red flags.
Some timeshare exit companies may say they have a “100% money back guarantee”, but this doesn’t actually mean much. These fraudulent companies can take your money upfront and then fail to pay you back. If a fraudulent company goes out of business, they have no legal liability to pay you back.
This is obviously terribly immoral, and these companies take advantage of people who are desperate to get out of their timeshare agreements, but it is way more common that you may think.
In choosing a timeshare exit company, go with the one that offers an escrow payment plan. Learn more about the importance of escrow here.
You also want to find a timeshare exit company that has good reviews, and an established rapport in the timeshare exit community. You can find a great timeshare exit company here.
There are a plethora of reasons to not walk away from your timeshare maintenance fees.
Now that you know the consequences, you may be having second thoughts about abandoning your timeshare.
Abandoning your timeshare can lead to legal and financial hardship. Not to mention, having a debt collector trailing you will be absolutely devastating to your credit score. A poor credit score will cause you many issues in the future.
Negotiating with a resort developer can feel like talking to a brick wall. Nine times out of ten, the resorts want to keep their owners tied to a timeshare agreement for as long as possible. Not many people find success in negotiating directly with their resort developers.
You may be able to sell your timeshare, but this is a long shot. Unless the timeshare is paid off in full, and is in a very desirable location, you are unlikely to find a buyer. Most owners who choose to sell their timeshares end up covering transfer fees, which will cost hundreds of dollars. You will also certainly be losing money on the deal – seeing as there is a very poor resale market for timeshares.
When abandoning, selling, and giving the timeshare back to the resort are all impossible, you have one other choice.
This is where timeshare exit companies come in. A reputable timeshare exit company can help cancel your timeshare agreement with minimal effect on your credit score. Many of these companies have years of experience cancelling timeshare contracts. Some companies have cancelled hundreds of thousands of timeshare contracts.
It’s important to seek out a timeshare exit company with an established rapport and an escrow payment option.
In the current pandemic, a lot of timeshare owners are seeking a way out of their timeshare contract. Luckily, there are a lot of options you can pursue before making the legally and financially unwise decision to abandon your timeshare.