TimeShare Nightmare

[Anonymous]

Hi does anyone know what will happen if i stop paying a timeshare mortgage?  I purchased a timeshare that i recently discovered was under fraudulent means and misrepresentation.  I have not used any of the free gifts they gave me when i signed this contract.  I just want out, but its not as easy as i thought.  They keep calling me and threatening to send me to collections.  I've been told by someone that hits on my credit for not paying a timeshare are not as bad as one thinks because lenders are aware of what a scam the timeshare industry actually is.  Is there any truth to this? 

[kiea]

My aunt purchased a timeshare last year.  She didn't make the payments.  She just got her credit report and the timeshare was on her report as a collection account.  Her score went down immediately.  The total was about 9,000.  I think the fact that it is a collection showing on your report is bad for your credit.

[Lel]

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mlf1027 wrote:

Hi does anyone know what will happen if i stop paying a timeshare mortgage?  I purchased a timeshare that i recently discovered was under fraudulent means and misrepresentation.  I have not used any of the free gifts they gave me when i signed this contract.  I just want out, but its not as easy as i thought.  They keep calling me and threatening to send me to collections.  I've been told by someone that hits on my credit for not paying a timeshare are not as bad as one thinks because lenders are aware of what a scam the timeshare industry actually is.  Is there any truth to this? 

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I don't have any firsthand knowledge, but I find it very hard to believe that any lender is going to look past any obligation that you fail to pay, regardless of the circumstances.  There's lots of people who have been victimized by predatory mortgage lending practices who have lost their homes in foreclosure.  Their credit scores have tanked and they're restricted in their ability to obtain a new mortgage for the next few years.  They're not receiving any special consideration because of deceptive business practices.

The only exception I can think of is in the case of foreclosure due to extenuating circumstances (major medical illness or death of a wage earner, for example).  Even so, the foreclosure and its deleterious effect on one's credit score remains, but the waiting period to obtain a new mortgage is shortened.  Obtaining other credit is still going to be very difficult, however. 

If you have definitive proof of fraud or misrepresentation at the time you signed the timeshare purchase contract, then you could try to seek legal remedy through the courts.  You'd have to read your contract line by line and be able to provide proof of any deception or breach of contract.  it won't be easy. 

[Anonymous]

Thanks for responding.  Did your aunt foreclose and by how many points did her score go down? 

[MattH]

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@Anonymous wrote:

Hi does anyone know what will happen if i stop paying a timeshare mortgage?  I purchased a timeshare that i recently discovered was under fraudulent means and misrepresentation.  I have not used any of the free gifts they gave me when i signed this contract.  I just want out, but its not as easy as i thought.  They keep calling me and threatening to send me to collections.  I've been told by someone that hits on my credit for not paying a timeshare are not as bad as one thinks because lenders are aware of what a scam the timeshare industry actually is.  Is there any truth to this? 

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Call a lawyer, yesterday, do not rely on advice from any person other than a good lawyer of your choice in a situation of this nature.

[DI]

Dave Ramsey would be a good source for info about timeshares.  He is always preaching how bad they are and to not get them.  Check his website. 

http://www.daveramsey.com/article/the-truth-about-timeshares/

Message Edited by DI on 12-03-2009 07:43 PM

[MattH]

Actually timeshares can work, if you know what you are doing.  My family has owned several weeks at a Colorado ski resort for a number of years, which has worked well for us because:

1. We knew the local market before buying
2. We bought them on the secondary market for a fraction of what the first buyer at a new property would pay
3. We already knew we planned to spend every Christmas there for a long time.

Perhaps 25% of timeshare buyers know what they are doing.

[haulingthescoreup]

Anyway, ignoring the virtues and vices of timeshares:

OP, you most likely have late payments showing, plus now you're about to be sent to collections. Neither the FICO scoring formula nor other lenders will much care that these derogatories were the result of a timeshare. They're looking at the fact that you promised to pay (signed a mortgage), and then didn't.

I'm not trying to sound harsh here by any means. I'm just saying that creditors are looking at your willingness to repay debt, as measured by past record, and so this will definitely stink up your credit.

You definitely need to act on this now, before it gets any worse.

[Anonymous]

Most timeshares do not report your payment history unless you got your own financing outside the timeshare company.

But, if you fail to pay, they will send to collections and this will hurt your credit and there will be no grace for the type of original creditor....so don't believe that.

If you believe the deal was fraudulent, then you need to get with an attorney, file with the state AG, FTC and BBB.  But make your payments till you get a legal remedy that can't be wacked on your credit.

And DON'T believe any of these services claiming they can buy or sell your timeshare.  Most are just trying to sell you an advertising service for hundreds of dollars that will get you nothing.

There are a few who will take your timeshare if you give it to them, meaning you own it outright, but don't want to pay maintenance anymore.