While the majority of members are extremely satisfied with a timeshare investment, some members find themselves in situations where they think about defaulting on their commitment. Has this occurred to you? If so, read this first as there are many consequences to timeshare default that you should be aware of. As expected, all financial contracts comes with legal responsibilities and you can expect serious repercussions if you do not pay your payments on time. While life can have some ups and downs that cause people to consider not paying payments for their timeshare on time, did you know that you could put yourself at risk for a timeshare scam if you stop paying? You could become a timeshare scam victim if you decide to work with a fraudulent timeshare cancellation company that tries to convince you they can help you when truly they cannot. Read below about timeshare default risks and use these tips to stay safe.
Timeshare Default Repercussions
An important timeshare default tip is to be fully aware of the consequences of not paying your payments. If you find yourself in a situation that prevents you from fulfilling your contractual responsibility, you must understand the default risks that will follow. To start with, your credit score will be definitely be adversely affected. In fact, you could even face legal action. These risks can affect your financial stability now and in the future if you decide to stop paying your payments. Therefore, take the time to do your research and thoroughly analyse the specific reasons that have you considering a timeshare default. Is there a way you can avoid default and stay on track? Explore all your options because once you stop paying your fees and maintenances dues, you will lose all rights to use the vacation unit until you come current with your payments.
Pay Your Timeshare Maintenance Fees
Every timeshare company has their own internal rules and regulations regarding payments and defaulting of payments. Some companies will charge penalty fees by the day, and others will charge on a monthly basis. The bottom line is you expect to be penalized by extra fees on top of your regular payments if you default. To understand your specific situation, carefully read go through your membership contract. In general, maintenance fees must be paid if you want to keep using your vacation unit. If you stop paying your maintenance fees, you lose all rights to use the vacation unit for your getaways. Remember if you do default, you will also probably have to pay a reinstatement fee as well. The timeshare company can even sell your debt to a collection agency which will cause more financial and emotional stress.
Avoid Timeshare Foreclosure
Another timeshare default risk to consider is timeshare foreclosure that could occur if you stop making your payments. First, a written warning will be issued about your late payments. Then, you will contacted by emails and phone calls as well. If you ignore these attempts and do not become current with your late payments, the timeshare company can decide to start foreclosure on your unit. Even your possessions could have a claim filed against them. Additionally, if you paid your timeshare membership with a credit card or took out a loan, you are still responsible for those payments and any late fees or interest that accrues as well.
Bad Credit Score = Future Loan or Credit Denial Risks
One major default consequence is that your credit score will be adversely affected. Anyone who ignores calls and emails from their timeshare company risks having their debt sold to a collection agency. Your credit score will be negatively affected and a good credit score is important for many reasons. If you ever want to purchase anything on credit or obtain a loan, it will be clear you have have defaulted on your Mexican timeshare. As a result, you will likely be denied a loan. The collection agency can sue you which will drastically affect your credit score even more. Credit collectors are very persistent and you could face a lot of embarrassment from persistent telephone calls and creditors that attempt to reach you at home or work.
Avoid Timeshare Cancellation Scams
Another big consideration and default risk is the fact that you may also become a target of a cancellation scam company. Timeshare cancellation scam companies operate by trying to convince existing vacation club members that they can cancel your timeshare. This is completely false as a vacation ownership membership can only be cancelled during the short cooling off period right after a contract is signed. Fraudulent cancellation companies claim they can save existing members from default consequences that come with not paying your regular payments. This is a complete scam that will only cause you further economic and emotional problems. Don’t become a timeshare scam victim! Always deal directly with your existing provider, and avoid third party companies that could be fraudsters trying to pull a scam.
The risks of timeshare default are serious and should be not be considered lightly.