What do I do about timeshare purchases I cannot afford?
Recently on our legal forum a user asked, “Last year I made a few terrible impulse purchases and bought two timeshares that I cannot afford. What are my options for getting rid of them? Can I sell them or just stop paying for them?”
Selling timeshares is a lucrative business. Companies often lure customers in when they are on vacation and likely to succumb to the marketing pitch. Although many buyers are happy with their purchases, many are not. In fact, many buyers find that the monthly maintenance fees, exchanges fees, and limited travelling options can be a real burden. Unfortunately, however, getting rid of the timeshare can also be difficult, if not impossible.
What are options for getting rid of a timeshare?
If you have decided you no longer want your timeshare you generally have four choices.
- Transfer your title to another party.
Transferring your property title to another party who is willing to assume the monthly payments and the balance of the loan is ideal, but the market for buyers is limited. Even if you have paid your loan for your timeshare and you are only left with the annual monthly maintenance fees, you still may be unable to find a buyer who is willing to purchase the property.
Now, there are some companies who advertise that they will sell a timeshare for you or will take the timeshare as a donation, but many of these advertised options are scams. Some companies may also require large payments for their services and then they may or may not actually sell your timeshare.
If you do decide to transfer the title of your timeshare to another party make sure that you have carefully read the contract and understand how ownership of the property can legally be transferred.
- Prove the original sale was fraudulent.
Although timeshare misrepresentation is well-documented, it can be difficult to prove. If you believe the timeshare presentation and sales tactics which were used to entice you to purchase the timeshare were fraudulent, you may be able to use this as leverage against the timeshare company to nullify the contract.
- Stop making payments.
Before deciding to stop making payments for your timeshare it’s important to understand the risks and consequences. For example, it is likely you will be sued for the balance of whatever debt is owed and the lender will seek a judgment against you. If the judgment is issued the lender may also have the legal right to garnish your wages, levy your bank accounts, and place liens on your property. If this occurs it’s likely your credit score will drop and you will end up paying what you owe.
If the inability to pay for the timeshare is only part of a larger financial crisis you could also consider filing for bankruptcy. Filing bankruptcy may eliminate certain judgments such as liens, wage garnishments, and bank account levies.
- Rent the timeshare out to a third party.
Although your options to rent a timeshare may be contractually limited, it might be possible to find friends and family that are willing to pay a small amount each year, at least enough to cover your annual maintenance fee, for a nice vacation.
Some time shares may also be exchanged for other vacation properties, making the option to rent it out more attractive.
Finally, if you took out a large loan to finance the purchase of the time share and the decision was made on a whim, it might be possible to refinance the loan with better borrowing terms, especially if you have good credit.
Buying a timeshare is a contractual obligation. You made the decision, and you signed the contract. Getting out of the contract will not be easy. There are several options, but given the timeshare market selling it and getting out easily and at a profit may be impossible.
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