We have all received the call at dinner time from the annoying telemarketer pitching the time share invitation. The lure of cash and a free vacation can be very enticing. I recently did one while I was in Hawaii through Shell Vacations. For our agreeing to do the timeshare presentation I received 5 nights in Hawaii, $100 cash and $100 in travel vouchers through US Airways. That can be a tough offer to refuse for an hour and a half of your time. What can be tougher is if you buy into a timeshare and stop paying on it.
Why Are Timeshare Presentations So High Pressure?
If you decide to go to a timeshare presentation, do not think you are just going to kick back and pick up your gifts at the end. You will be getting a very convincing presentation that will seem like a great idea. You may even feel stupid for not buying such a great idea.
The sales person, typically a real estate agent trained in selling timeshares, who does the time share presentation is usually a seasoned professional and will push all of your buttons to try and make you buy. It will be high pressure all the way. When my wife and I went to our presentation, I could not wait to get out of there. I am clear that for some people they make sense but I was clear that a timeshare was not for me.
How Much Is A Timeshare?
The timeshare that we looked at was $30,000. I knew going into the presentation that one of the hidden fees they hardly mention is the monthly maintenance fee. In our presentation, I was never really clear on what the monthly maintenance fees were as well. Even if you do not use the timeshare you still have to pay the monthly fees.
If you are the type that schedules a yearly vacation, a time share would probably make sense. If you are like me and do everything last minute, it may not work out well for you. You really need to know how you really plan for things.
What Will Happen If I Cannot Make The Payments For The Timeshare?
This question is asked a lot and the answer can be complicated depending on the policies and procedures that are in your particular contract. There are a few points that are the same whether you have a right-to-use, deeded timeshare or have a completely paid off timeshare.
Can A Timeshare Be Foreclosed On?
A timeshare is treated just like a piece of real estate. If you stop paying on a real estate loan, the foreclosure process will start. A timeshare foreclosure will follow the same rules and regulations as a homeowner’s deed would. Even if you have paid the cost of your timeshare off, you can be foreclosed on even if you stop paying on the maintenance fees.
After just one missed payment, you will start getting calls from your timeshare company collection department. They may also report the non payments to the IRS. Not paying your payment may give you a taxable event in the eyes of the IRS and you will get a 1099. The non payment can be considered income.
Can A Collection Agency Call Me If I Do Not Pay My Timeshare Payment?
A bill collector can most certainly call you if you do not make your payment. They probably will start calling, so be ready if you miss a few payments. Some collection agents can be a little rough when trying to collect on the debt.
Typically the timeshare company does not want to take the property back. After all it costs them time and legal fees. I have heard of circumstances of resorts offering to lower the amount due on the principal and maintenance fees as well. You may want to see if they are willing to work it out with you before you just throw in the towel.
What Happens To My Credit Score If I Am Foreclosed On By My Timeshare?
You credit score will definitely take a major hit. You will have a foreclosure on your credit report. You will not be able to buy a home for at least three years from the date of the foreclosure. However there are some lenders that do not count it as a foreclosure. You will need to speak with a mortgage broker about this. They will be able to research it for you.
A timeshare foreclosure for missing payments should be avoided at all cost. Before you buy a time share make sure that you really understand what you are getting into. Do not feel bad for the timeshare salesperson if you do not buy. They won’t be making the payment, you will.
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