Timeshare debt is one of the most common and most difficult forms of consumer debt to get rid of. Those who have timeshare debt can be subject to excessive fees, interest charges, and a loss of vacation use as a result of being unable to sell or surrender the property. A reputable and experienced timeshare exit company can help you resolve your timeshare debt issues quickly and affordably.
Timeshares are a popular vacation destination for many people, but they do not offer any investment value. Instead, the property simply allows you to use a specific time of the year for a predetermined fee. In some cases, the cost of buying a timeshare can be very high and even more expensive than renting a hotel room for the same period of time.
Because of the above, timeshares are often purchased with financing from a resort developer or sales agent. The financing is usually secured through hypothecation, which involves the developer pledging or assigning consumer promissory notes to an investor or finance company that specializes in the industry. This gives the timeshare developer access to funds needed for sales, marketing, and management expenses associated with the development and operation of the timeshare resort.
The lender also benefits from this transaction, as the monetized notes are an excellent form of collateral for a loan to finance timeshare developments. As a result, lenders typically require a certain minimum FICO score before they will pledge or assign consumer timeshare notes to them. This requirement has served as a useful discipline on developers, preventing them from selling to subprime buyers with low FICO scores who may not be able to repay their timeshare loans in the future.
Timeshare debt can be very difficult to get rid of, and many consumers fall into serious financial trouble because of the high costs involved with owning and maintaining a timeshare property. Once the debt becomes delinquent, the original creditor will transfer the account to a collection agency who will relentlessly contact you for payment. As a result, it is essential that you remain current with your timeshare mortgage and assessments.
If you are unable to keep up with your timeshare payments, filing for bankruptcy may be an option that is available to you. Depending on the type of bankruptcy you choose, your state’s exemption laws and how much equity your timeshare has (if any), you may be able to completely wipe out your timeshare debt by filing for Chapter 7 Bankruptcy.
It’s important to note that even if you do successfully file for bankruptcy, it will likely take 3-5 years to clear your name of the timeshare debt after which you’ll be free to buy or rent a home, motor vehicle or other piece of personal property. However, it’s important to understand that not all bankruptcy attorneys will know how to handle a timeshare-related claim, and you can end up with ineffective results or worse. This is why it’s crucial to hire an attorney with a proven track record in the area of timeshare debt resolution and cancellation.