What's the Real Effect of Not Paying Time Share Maintenance Fees?
December 31, 2013 3:07 PM Subscribe
Let's say that I own a timeshare that I cannot sell or give away or rent. Let's read as given I am stuck with this thing for 7 years AND every year there are "maintenance fees" and "annual charges" and all sorts of things costing me up to $6000 a year. Let's just imagine this is the situation and I can't pay them anymore.
People who understand how credit really works, please help me understand the ramifications of what exactly would happen if I just stopped paying and changed my phone number?
I am not making any purchases any time in the next 20 years that will require a credit score.
I've read that for most lenders (and for the record I am NOT looking for a loan for at least 20 years if ever) will look at a timeshare black mark with a grain of salt. True?
Again, I am NOT looking for a way to get rid of this thing. I can't donate it. I can't give it away. I've tried selling and renting it for over a year. I've done all of those things and NOTHING. I just can't pay these fees anymore.
People who understand how credit really works, please help me understand the ramifications of what exactly would happen if I just stopped paying and changed my phone number?
I am not making any purchases any time in the next 20 years that will require a credit score.
I've read that for most lenders (and for the record I am NOT looking for a loan for at least 20 years if ever) will look at a timeshare black mark with a grain of salt. True?
Again, I am NOT looking for a way to get rid of this thing. I can't donate it. I can't give it away. I've tried selling and renting it for over a year. I've done all of those things and NOTHING. I just can't pay these fees anymore.
"I am not making any purchases any time in the next 20 years that will require a credit score."
Are you purchasing any type of insurance? Are you going to rent a place to live. Are you going to have some sort of emergency that demands an expensive purchase (furnace, car repair, whatever?) Do you have a credit card which can raise your rate if there is a negative ding on your credit report?
Are you prepared to have the debt sold to a collection agency that WILL find you eventually, garnish your wages, take you to court?
Are you going to apply for a job that might require a background check?
Find a way to continue to pay the bills....
posted by HuronBob at 3:43 PM on December 31, 2013 [1 favorite]
Are you purchasing any type of insurance? Are you going to rent a place to live. Are you going to have some sort of emergency that demands an expensive purchase (furnace, car repair, whatever?) Do you have a credit card which can raise your rate if there is a negative ding on your credit report?
Are you prepared to have the debt sold to a collection agency that WILL find you eventually, garnish your wages, take you to court?
Are you going to apply for a job that might require a background check?
Find a way to continue to pay the bills....
posted by HuronBob at 3:43 PM on December 31, 2013 [1 favorite]
The above responses are correct: credit ratings pertain not just to purchases but to debts, some job applications, interest rates you pay on outstanding debt, etc.
You have two options: declare bankruptcy or continue to pay until such time that you are able to extricate yourself from the obligation or the obligation ends.
posted by dfriedman at 3:49 PM on December 31, 2013
You have two options: declare bankruptcy or continue to pay until such time that you are able to extricate yourself from the obligation or the obligation ends.
posted by dfriedman at 3:49 PM on December 31, 2013
If you default on *whatever*, then what actually happens in most cases is you get lots of annoying calls and mail about it, and you get a negative mark on your credit score.
It is *possible* that your creditor will sue you, but it's fairly unlikely because they tend to realize that the reason people stop paying them is because they don't have any money. In such a case, even if they get a judgement in their favor, it can't obligate you to give them money you don't have.
You can live with bad credit (yes, including renting cars). I have done it. You probably won't be able to buy a house (unless you can pay cash), if you want to take out a car loan, it will be at a very high interest rate. You probably won't get any credit cards. If you want to rent a place to live, many corporate-type places with property management agencies and such won't rent to you, you may find yourself explaining your situation in person to landlords of single buildings and such. I did this a couple times. It limited my options but I still found decent places to live. This will reset after 7 years. I don't know that a single default on one debt will be so bad as the position I was in. I managed. I bought a house seven years later.
I never found that my bad credit score mattered much for anything other than taking out loans or renting apartments (i.e., no employer ever checked it, no insurance company, etc).
If I already owned a home and was prepared to stay there for seven years (and not refinance), I wouldn't really care that much personally about my credit score.
posted by tylerkaraszewski at 3:53 PM on December 31, 2013 [4 favorites]
It is *possible* that your creditor will sue you, but it's fairly unlikely because they tend to realize that the reason people stop paying them is because they don't have any money. In such a case, even if they get a judgement in their favor, it can't obligate you to give them money you don't have.
You can live with bad credit (yes, including renting cars). I have done it. You probably won't be able to buy a house (unless you can pay cash), if you want to take out a car loan, it will be at a very high interest rate. You probably won't get any credit cards. If you want to rent a place to live, many corporate-type places with property management agencies and such won't rent to you, you may find yourself explaining your situation in person to landlords of single buildings and such. I did this a couple times. It limited my options but I still found decent places to live. This will reset after 7 years. I don't know that a single default on one debt will be so bad as the position I was in. I managed. I bought a house seven years later.
I never found that my bad credit score mattered much for anything other than taking out loans or renting apartments (i.e., no employer ever checked it, no insurance company, etc).
If I already owned a home and was prepared to stay there for seven years (and not refinance), I wouldn't really care that much personally about my credit score.
posted by tylerkaraszewski at 3:53 PM on December 31, 2013 [4 favorites]
There are charities you can donate your timeshare to and get a tax write off, my friend did it. If you're interested I can ask them where they did it.
posted by julie_of_the_jungle at 5:25 PM on December 31, 2013
posted by julie_of_the_jungle at 5:25 PM on December 31, 2013
Mod note: This is a followup from the asker.
This particular company only owns this one place so they're not part of RCI or Marriot or a large company, they have a very bad reputation, and EVERY donation site refuses to take a timeshare from this place. So no, this timeshare cannot be donated.posted by cortex (staff) at 6:12 PM on December 31, 2013
You can default on it. They can sue you, and perhaps win a judgement. Or you can declare bankruptcy and list the timeshare place as a creditor. That's the easy and clean way to do it.
posted by Ruthless Bunny at 7:42 PM on December 31, 2013 [2 favorites]
posted by Ruthless Bunny at 7:42 PM on December 31, 2013 [2 favorites]
From a strictly dollars-and-cents point of view, leaving out any ethical considerations:
Seven years from now, you can be in one of two places:
1. You continue to pay the $6k/year, and be out $42k (plus the lost opportunity cost of not investing that money somewhere else);
OR
2. You can walk away from the obligation, and squirrel away some of that money somewhere out of sight, and have the black mark drop off your credit score at about the same time you'd be done with Option 1 (and not out the 42K).
Many, many people do just fine with super-shitty credit or no credit. Yes, some of your options will be limited, but you can still find a place to live; get a credit card; get a job; rent a car.
I'm not advocating for either choice, but just know that one black mark on your credit isn't a death sentence.
posted by nacho fries at 6:12 PM on January 1, 2014
Seven years from now, you can be in one of two places:
1. You continue to pay the $6k/year, and be out $42k (plus the lost opportunity cost of not investing that money somewhere else);
OR
2. You can walk away from the obligation, and squirrel away some of that money somewhere out of sight, and have the black mark drop off your credit score at about the same time you'd be done with Option 1 (and not out the 42K).
Many, many people do just fine with super-shitty credit or no credit. Yes, some of your options will be limited, but you can still find a place to live; get a credit card; get a job; rent a car.
I'm not advocating for either choice, but just know that one black mark on your credit isn't a death sentence.
posted by nacho fries at 6:12 PM on January 1, 2014
Been here and done this....Call them up and ask if they will take a deed in lieu of foreclosure and tell them you have no ability to pay...done, do not want to pay, do not intend to pay and they will have to sue you to get the money. Usually after some bluffing they will call you or write with the paperwork and the darndest thing is that they don't put it on your credit report...and they don't because they don't want you calling all those potential clients that they are reselling the place to about the awful fees and costs....if you want to be that way and do that to the "owners"....
Further, 6,000 a year sounds like they sold a bunch of timeshares knowing that they had lots of work to do and are gouging. The homeowner board is probably a bunch of the folks who are selling the timeshares...always the downside of timeshares here.
Good luck...quit sending money.
posted by OhSusannah at 12:23 PM on January 8, 2014
Further, 6,000 a year sounds like they sold a bunch of timeshares knowing that they had lots of work to do and are gouging. The homeowner board is probably a bunch of the folks who are selling the timeshares...always the downside of timeshares here.
Good luck...quit sending money.
posted by OhSusannah at 12:23 PM on January 8, 2014
This thread is closed to new comments.
How can you possibly know this? I rented a car last week and they had to run a credit check.
posted by Sara C. at 3:22 PM on December 31, 2013 [5 favorites]