The combination of an iffy economy, declining property values, and high-pressure sales techniques on the part of timeshare sellers has resulted in large numbers of people wishing they could dispose of their timeshares.
Most timeshare buyers are reassured, in the purchase discussion, that their timeshares will hold their value and will be easy to sell should their circumstances change. But that's not likely, as many timeshare owners find to their dismay.
Many people think timeshare owners can simply turn the timeshare back or walk away from the contract without repercussions. Wrong! A timeshare is treated the same in terms of law as regular real estate. A timeshare is foreclosed in the same way as a home mortgage. The only difference is that a is also a consequence if your timeshare property is fully paid off and you are obligated only for the maintenance fees.
What happens if you're unable to keep up payments on your timeshare? That varies depending upon the terms of your particular contract and whether yours is a deeded timeshare or a right-to-use agreement. But the general pattern is that your timeshare resort's collection company will begin calling when your first payment is missed, late fees will be imposed, and within a few months, the Internal Revenue Service may be notified of your payment status.
Timeshare companies aren't keen to foreclose, so some time will elapse before proceedings will begin in most cases. During this time, some resorts will be amenable to negotiate a satisfactory arrangement, such as lowering the payments or amount due on the principal, reducing maintenance fees or making them due every two years, or adding perks to your timeshare package. Some may offer you the chance to sign over a Deed in Lieu of Foreclosure. But don't count on it. This is a time when it's a good idea to seek the services of a qualified
If your timeshare company proceeds to foreclosure, you aren't going to emerge unscathed. You'll receive notice that your timeshare will be sold at a public auction or trustee's sale. This is a legal proceeding, a matter of public record, which will be reported both to the IRS and credit bureaus. There goes your credit for the next seven years: you'll find it difficult, if not impossible, to finance a car, get a loan or buy a home. And that's not the worst of it: a trustee's sale or auction rarely raises the amount that's owed, including late fees, by the time a timeshare property is foreclosed on. Your timeshare company can still take legal action against you, suing for the balance owed.
All of this is a matter to think carefully about before you commit to a timeshare. If you have one, and find yourself in the crunch because of an unanticipated change in your circumstances, a marriage dissolution, job layoff or major medical expenses, for instance, you'd be well advised to seek legal counsel and review your options before you miss your first payment.
If you would like information on how to avoid without hiring an expensive timeshare lawyer visit and request a free consultation.
For every timeshare owner who finds owning a piece of a resort or holiday chain a great deal, there's at least one who's having second thoughts. One of the techniques in the arsenal of the sales staff of many timeshare resorts is the staged sale.