Defaulting on a Timeshare: What to Know

Defaulting on a Timeshare: What to Know

Timeshare and vacation clubs in Mexico are a great way to carve out quality time with your loved ones. Plus, by paying ahead at today’s low rates, members can save money over time, too. Anytime you invest in timeshare ownership, make sure you are aware that there are serious repercussions if you do not pay your payments as promised. Some individuals may find themselves in unfortunate situations where they are unable to continue making timely payments. If this happens, individuals often search the internet for answers to this same question and this act alone can put them at risk to be scammed by a fraudulent timeshare company. Read below so you can learn what happens if you stop making your timeshare payments. 

Defaulting on a Timeshare: What to Know

To start with, it helps to know what to expect if you decide to stop making your payments. If you find yourself in a dire financial situation that keeps you from fulfilling your contractual responsibility, it is essential to understand what problems will follow. For example, your credit score will be adversely affected, and even legal action may be taken against you if you stop making your payments. Likewise, once you stop paying your regular fees and maintenance dues, members lose all rights to use their timeshare unit until all late payments are made. Remember, the whole point of joining a vacation club is to make sure you have quality time with your loved ones. Relaxing and enjoying well deserved vacations in Mexico are priceless. Don’t make a mistake that you will later regret by defaulting on a timeshare.

Default on Timeshare

Timeshares Default Fees

Next, all timeshare companies have their own rules and regulations regarding when payments need to be made. There are also protocols in place if a member defaults. In general, the majority of vacation club providers charge delinquent fees and interest fees once a member stops paying. Carefully check your membership contract so you can understand all the specifics. In addition to the regular payments, maintenance fees need to be updated to date in order to keep using your vacation unit. Anytime members cease to pay their maintenance fees, they will always lose rights to use the vacation unit. As a result, it is best to stay current so you can enjoy great vacations in Mexico. Plus, if you do default on your timeshare payments, you will likely also have to pay a reinstatement fee if you wish to use your unit again. Lastly, the company may sell your debt to a collection agency if they believe you have no intention to make good on your back due payments. 

Foreclosure Proceedings

In general, the timeshare company will first send you a written warning if you stop paying your payments. In addition to the written letter, they will likely contact you by emails and phone calls as well. If they are unable to get in touch with you and you do not come current on your payments, the timeshare company will often file for a foreclosure and your possessions could have a claim filed against them. In addition to foreclosure lien, be aware that if you took out a loan or paid your vacation club membership with a credit card, you are still liable to pay those payments as well as any late fees or interest fees. 

Credit Score Is Affected

If you have defaulted on your timeshare payments, and also ignore all calls and emails from the timeshare company, your existing debt will be sold to a collection agency which will adversely affect your credit score. This is something to think about because your credit score is always considered anytime you attempt to purchase any large items on credit. If your credit history has a negative incident recorded, it is very likely you will be denied whatever loan or credit you requested. Credit collectors are known to be very persistent and aggressive when working to collect late payments. This could result in embarrassing situations if your friends, family or co-workers see you are being pursued by collection agencies.

Cancellation Scams To Avoid

Lastly, there are other risks to consider if you default on your timeshare payments. For example, you could become a victim of a timeshare cancellation scam. Fraudulent timeshare cancellation scam companies try to convince existing members that they can help them avoid the severe consequences of not paying their membership fees. However, this is a complete scam that will only cause further economic turmoil and stress. Remember, it is always best to only deal directly with your existing provider and not involve any third party companies as they could be fraudulent. 

We hope this article helped you be aware of the consequences of defaulting on your timeshare. Financial arrangements are serious. Defaulting on your timeshare should not be taken lightly! Instead, do your part to be financially responsible and find a way to stay up to date on your payments. Wondering which vacation club is the best to join? The Villa Group has lovely resorts in the best destinations in Mexico. They have spacious accommodations, luxury amenities and top services. That way, you and your family can enjoy wonderful vacations in Mexico now and in the future. Contact them today to see if you are eligible to join their exclusive vacation club.

Read this for more information.

Guide to Timeshare Rescissions in Mexico

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