Timeshare debt is a common problem that can be difficult to deal with. If you are struggling with your timeshare, it may be a good idea to seek the help of an experienced timeshare attorney. Often, these professionals can help you get your timeshare cancelled or refinanced in order to eliminate your financial obligations and get back to living your life without the burden of timeshare ownership.
Buying a timeshare can seem like a great idea, but it is very easy to fall into a situation where you are overwhelmed by the costs and unable to afford your timeshare. There are a number of factors that contribute to this problem, including:
The Raw Costs of Owning a Timeshare
When you purchase a timeshare, you will be paying for a fraction of the property’s value. In addition, you will be responsible for paying fees and assessments that are required by your resort or developer. These fees will not be waived, and they will be added to your balance each year.
You will also have to pay for maintenance and repair fees, as well as fees for any damage that occurs to the property. These expenses are not disclosed to you at the time of purchase, and they can quickly add up to a large amount of money that you cannot afford.
The Credit Impact of a Foreclosure
When your timeshare goes into foreclosure, it is reported to the credit bureaus and can negatively affect your credit score. Foreclosures typically lower credit scores by as much as 100 points and can have a lasting effect on your ability to obtain future loans.
Another major concern with timeshares is that they can be extremely expensive to maintain. If you want to stay at the resort, you will have to make monthly payments that can be quite high. This can be particularly problematic if you are struggling to make ends meet or if you have health issues that limit your ability to travel.
There are many different types of timeshares, but they all come with certain advantages and disadvantages. The most important consideration is that the owner does not own the property itself, but instead has a right to use it during specific times each year.
These timeshares can be deeded, leased or undeeded. A shared deeded timeshare, for example, is a form of real estate where the owner owns part of the property and has a lien on it that requires them to make payments each year.
If the owner does not make payments, a foreclosure can take place. Foreclosures have a negative impact on credit for up to seven years and can severely affect your ability to apply for new loans or mortgages in the future.
A home equity loan or line of credit (HELOC) can be used to refinance your timeshare, but this is a complicated process. You will need to find a lender that is willing to take on the risk of this type of debt, and you will need to demonstrate to the lender that you can make your payments and meet all of the terms of the loan.