Let’s say that a couple, whom I will call Mom and Dad for short, bought a timeshare (Tahiti Village Las Vegas) a while back when they were a bit younger and traveled a lot. Now they are older and have a few health problems and don’t use the timeshare. They tried gifting it, but no one wanted it. (Surprise!) Now they are saying they just want to stop paying the maintenance fees on it.
So a quick google search seems to show that the potential issues with not paying the fees are a) tanking their credit score, b) the timeshare company will repossess it (which they probably don’t care about), and c) they might sue for the fees that they don’t pay (this looks like the most unlikely but also the most worrisome – but when I look at this specific company it doesn’t look to be the case).
Mom and Dad say they don’t care if their credit score gets tanked – they’re not likely to be buying any other large purchase in their life, and I assume they’d sell their current house and use that to fund a nursing home if that’s necessary. I still feel like it’s not a good idea to tank one’s credit score for the sake of a timeshare, but I honestly can’t think of a good reason why not except that I’m naturally risk-averse.
It sounds like this specific timeshare is worth nothing on the open market and there are lots of timeshare exit companies that help you get out of timeshares but many of them are scams, so it’s probably more than it’s worth to put the time into trying to find a legit one.
So now I’m curious: does anyone have experience with just… not paying timeshare fees any more? Or know anyone who has? Or can think of reasons why tanking one’s credit score for the sake of a timeshare is a bad idea? Or can think of another way to get out of this?
They should stop paying. Timeshares are a quasi-legal scam.
The Timeshare company will probably come after them for fees and with collection agencies. They will not repossess most of the time.
Odds are fairly good defaulting on a timeshare will be a lesser hit that defaulting on a loan or late credit card payments. The Credit Agencies know timeshares are quasi-legal scammers.
Under no circumstances should anyone accept the timeshare, you’ll never get out of it.
John Oliver did a really in-depth show on Time Shares this year, might be worth checking out.
You’d have to read the timeshare agreement really closely to see what “Mom and Dad” signed. Back in the bad days before any consumer laws, unscrupulous businesses had sales contracts for things like appliances and furniture that allowed them to put a lien on your house if you didn’t pay.
Or the the condo could just sell the debt to a collection agency, who will hound Mom and Dad and may decide it’s worth it to sue.
Even if the current timeshare owners don’t mind the credit hit, the timeshare company could sue the estate to get the fees and penalties paid off. It’s going to be a debt like any other. If the estate has assets when the owners die, the creditors are supposed to be paid off from those assets. If instead the heirs get the money, the creditors may sue the estate and executor. So the problem of the fees won’t necessarily just go away eventually. To mitigate this risk to the estate, the estate should be set up so that there are no assets left in the estate when the owners die. If everything is in a trust or transferred through account beneficiaries, there will be little in the estate itself and nothing for the timeshare company to recoup.
This is a question where the answer most likely depends on the jurisdiction, but in the trust law system I’m familiar with (England), a trust is not a corporation; it is a fiduciary duty of a trustee to manage property for the benefit of someone else, but title to that property is fully vested in the trustee. If holding the asset incurs liabilities to third parties, then the person in whom the asset is vested will be liable. So you’d need to find someone willing to act as trustee under such cirucmstances - I certainly wouldn’t.
I would have your parents consult with an attorney that has dealt with timeshare disputes before they stop paying. In all likelihood that would be a bankruptcy attorney. Not that they would be interested in a bankruptcy, but I would imagine that a BK attorney is likely to have dealt with more timeshare companies and disputes than most probate or litigation attorneys. For the price of a consult, they may find that not paying is a whole lot more trouble than they imagined.
There are numerous companies that advertise to help you get rid of credit card debt; usually all they do it help you negotiate a settlement with the CC company, who then reports it as a writeoff to the credit bureaus. Sure, you get out of some debt now, but you’ll pay for that in higher interest rates if you need to buy a new car or house in the next couple of years. It’s my understanding that these wonderful companies, who charges you a fee to help you do this, kinda-sorta forget to tell you about this downside.
What about the timeshare exit companies I hear advertising on the radio? Is there a hidden downside to using them if you want to get out of a timeshare? Just curious; don’t have a timeshare & don’t see the appeal in one.
Assuming the timeshare is completely paid off and they are only paying the yearly maintenance fees, the resort might offer a Deed-back program? They don’t always make it obvious that they do. This is how my wife and I got rid of our Marriott-Vacation Club timeshare once we decided it wasn’t worth keeping anymore. The process was relatively straight-forward, although it took some digging and phone calls to find out exactly what the process was.
Cost us nothing at all, although we didn’t make any money off of it either, which was absolutely fine with us. Just filled out some paper, signed some transfer docs when they arrived in the mail about a month later, and got confirming paperwork about a month after that, and it was done. We did make sure to give ourselves 2-3 months so we weren’t paying the maintenance fee in January before it was all completed.
As far as Timeshare companies go, Marriott VCI wasn’t bad. Just expensive, and we felt that money was better spent financing our own vacations instead of doing it through them. Our timeshare property was in Vegas, and we only actually used it once. Every other year we either “rented” our weekly share out, converted it to Marriott Rewards points, or gifted our week to friends/family. It was nice to have those options but not worth the expense. If we did it all over again, we would have never gotten it of course, but we never had any issues whatsoever with Marriott VCI as a company.
@Spiderman: I get the impression that most timeshare exit companies are the same sort of vaguely-scammy thing, but I don’t know and would love to hear from anyone else who does.
@Dorjan, they also have a Marriot Vacation Club timeshare which they still use, and it looks like they could give that one back once they’re done using it (if my sister doesn’t decide she wants it) (we definitely don’t want it). The Las Vegas one, which is not through MVC, doesn’t appear to have a deed-back program (probably because it’s less popular, lol), as far as I can tell.
Would you be willing to tell us which time share company it is? That might help and I doubt it would make your security vulnerable. If not, I bet if you Google the name you could find some more information once you sift through the scams. There is probably a timeshare subreddit where people could really help
I don’t see why not. My husband pointed out that this is what happens with houses – the contracts and laws are set up so that if you stop paying your mortgage, the house goes into foreclosure, and that’s pretty much it – it’s not against the law to stop paying your mortgage, it’s just spelled out that there are certain consequences. But the laws are probably different for houses and timeshares. I sure hope I can convince my parents to go see a lawyer.
(sorry, @Dorjan, this was a reply to you – for some reason I am unable to use the reply button accurately today)
