How to Get Out of a Timeshare
The Legal Ways to Cancel a Timeshare Without Ruining Your Credit
Here we discuss the legal ways to get rid of a timeshare without negatively impacting your credit score. We know that timeshare agreements can be tricky, however, over the years, we have found specific ways to help people get out of their timeshare agreements without running their credit, all done the legal way while allowing for the elimination of timeshare agreement obligations.
While Timeshares can be the source of many cherished memories, it can drain a significant amount of money from the old wallet as well. It is especially true if you don’t use the Timeshare frequently enough to off-set the total cost of ownership of that timeshare. Maybe you’re too busy or simply can no longer afford its maintenance fees.
There can be several other reasons for wanting to get rid of your timeshare… like, for instance, maybe you and your family has changed your schedules, you’re living out of the country, or facing unexpected financial instability. Whatever the reason is, timeshares are not always a good investment, especially with the cons start to outweigh the pros.
Note that affording a Timeshare requires a considerable amount of maintenance fees that increase each year. Not to mention the cost to visit your timeshare resort can also be one of the reasons if you have had financial setbacks. You don’t want to put yourself in a situation where you have to consider what happens if you stop paying your timeshare maintenance fees. Regardless of your reason, if a timeshare maintenance fee or payment is due, it can eat away at you. This is when you feel stuck or trapped and wonder ways to get rid of your Timeshare. Keep in mind that timeshare cancellation can be overwhelming if you’re not familiar with the right process.
But it doesn’t mean that you can’t get out of your timeshare. You can rely on different ways to cancel a Timeshare without ruining your credit. If you’re not familiar with those ways, fear not. We have you covered here. This article includes everything you need to know about getting out of a timeshare without ruining your credit. However, before plunging into the discussion of timeshare cancellation, let’s briefly overview what a timeshare is and how it works.
What is Timeshare and How It Works
Let’s begin understanding it with the basics. Timeshare typically refers to a “vacation property that comes with fractional ownership. The ownership of a vacation property is on sharing and has weekly increments. Many big hospitality brands, including Disney, Marriot, and Wyndham, offer timeshares to their guests on a large scale. Most of them include travel club memberships for resort owners with customization and flexibility for their excursions.
American Resort Development Association defines “timesharing” as shared ownership of a holiday resort unit. These vacation units may or may not incur interest in the properties. Owners in Timeshare can get time increment, which allows them to use shared ownership. In general, they are weekly increments but may vary depending on the resort and developer owners choose. Put simply, timesharing is all about sharing a resort with others, but owners get an assigned week to spend time there. Traditionally, guests or owners travel to their vacation resorts (timesharing) during a “fixed week.” This week can be at any time of the year.
Many families choose the same time to travel to their timeshare vacation resort. Despite the high maintenance fee, the vacation timeshare industry has shown tremendous growth in the past few years. In fact, ARDA’s AIF Foundation has found that Timeshare has made $10 billion in sales revenue. The exponential growth of the industry has outperformed traditional hotel occupancy.
How to Exit a Timeshare Without Ruining Your Credit Rating:
Exiting a timeshare can be a complex process, but with the right steps, you can do it without harming your credit rating. Here’s a comprehensive guide to help you navigate this process effectively.
Review Your Contract
Before making any decisions, carefully review your timeshare contract. Look for any clauses that detail the process for cancellation or exit. Some contracts may include a “cooling-off” period, which allows for a penalty-free cancellation within a specified timeframe.
Contact the Timeshare Company
Reach out to your timeshare company to discuss your options. Some companies have programs or departments specifically designed to assist owners looking to exit their timeshare agreements. They may offer deed-back programs or other exit solutions.
Hire a Timeshare Exit Company
If your timeshare company is uncooperative or you’re unsure about handling the process yourself, consider hiring a reputable timeshare exit company. These companies specialize in helping owners legally and ethically exit their timeshare agreements. Ensure the company you choose has positive reviews and a track record of successful exits.
Consult a Real Estate Attorney
A real estate attorney with experience in timeshare exits can provide invaluable advice and assistance. They can review your contract, negotiate with the timeshare company on your behalf, and ensure all legal aspects are covered to protect your credit rating.
Transfer Ownership
If a direct exit isn’t possible, consider transferring your timeshare ownership. This can be done by selling the timeshare, gifting it, or donating it to a charity that accepts timeshare donations. Ensure the transfer process is handled legally to avoid any future liabilities.
Avoid Stopping Payments Abruptly
While it might be tempting to stop paying your timeshare fees, doing so can severely damage your credit rating. Instead, continue making payments until the exit process is officially completed. Stopping payments can result in collections, legal action, and a significant negative impact on your credit score.
Get Everything in Writing
Whatever agreement you reach with the timeshare company, exit company, or any third party, make sure to get all terms and conditions in writing. This documentation will be crucial if any disputes arise or if you need to prove the termination of your contract.
Check Your Credit Report
After successfully exiting your timeshare, regularly monitor your credit report to ensure that the exit has not negatively impacted your credit score. If you notice any discrepancies or issues, address them immediately with the credit bureaus.
Best Ways to Get Rid of a Timeshare without Ruining Your Credit Score
Talk to Your Timeshare Developer or Company
Getting rid of your Timeshare may get daunting as there is no specific formula for property holders.
But one of the unanimous recommendations that may or may not work in your favor is to contact your resort owners company.
Many resort companies and HOA works with a resale program, commonly known “dead-back” option.
The program facilitates resort owners who want to cancel their timeshares and doesn’t have any outstanding mortgages.
This might sound bizarre to you, but many big hospitality brands offer unpublicized programs for owners.
These programs aim to help owners facing hardships that terminate their timeshares.
Most of them are outright surrender programs that allow owners to cancel their Timeshare after paying a certain amount of upfront fees. This amount may be equivalent to a maintenance fee of two years.
Wyndham, for example, offers a public exit program referred to as “Ovation.”
The program is not only comprehensive but also enables resort owners to get out of their timeshares.
Suppose you agree with a developer that doesn’t offer any in-house program to recycle Timeshare. In that case, it can typically refer you to a certified resale broker who has expertise in timeshare resales.
Determine Realistic Value of Your Timeshare on the Resale Market
It is worth mentioning that a timeshare doesn’t always have an inherent value. Many timeshare owners often assume that they can’t sell a timeshare unit on the resale market.
But this is not the case always, especially if your Timeshare has an older legacy and exceeds demand over supply.
According to experts, owners should do some research to find out the real resale value of the Timeshare.
Remember, just searching on the internet doesn’t always give you accurate results.
You may run into organizations that guarantee you desired prices for your Timeshare but won’t sell them. The best way is to consult a reliable timeshare broker who specializes in renting and selling timeshares.
The expert and experienced broker can also give owners free estimates.
Regardless of the service you choose, if you want to terminate your contract for any reason, seeking out professional advice for your Timeshare will benefit you.
His experience and skills will impact your decision to put your Timeshare on rent or sell. Also, you need to prepare for the pain that your vacation unit is worth paying for.
Rent or Sell Your Timeshare
Once you do your research on your time share’s resale value, you can put it on rent or for sale.
The option is suitable for recovering some of the expenses. If you don’t know how it works, your licensed timeshare broker can provide the service.
In fact, brokers handle expensive timeshares owned by famous brands. These brokers usually resell high-end Timeshare on the resale market for a fraction of the actual price.
However, you may find brokers who provide the same professional services at low prices without charging any commission on timeshare sale.
You can also use a DIY resale option if you don’t want to spend money and are more comfortable dealing with your own closing.
Don’t forget that not all timeshares sell quickly. You may have to wait for weeks or months until your Timeshare gets a reasonable price.
At the same time, the high-season timeshares tend to rent or sell quickly.
Briefly, selling or renting your Timeshare is a good idea to buy some time. This way, you can figure out an exit plan.
Give Ownership to Someone in your Family or Friends
You might have considered this option to get rid of your Timeshare. Without a doubt, the idea can help you make an easy deal to get out of your vacation unit’s ownership without hurting your credits.
All you need is to find someone in your family and friends to take over your Timeshare’s ownership. In this case, your friend or family can take over the profits and payments too.
If you feel this option is not viable, you may take other routes.
Give Your Timeshare Away
If selling or renting your resort unit doesn’t seem a practical option, consider giving it away. Many owners do that with the timeshares that have the deed and even claim a charitable deduction.
However, if you don’t have sufficient knowledge of how to do it efficiently, you may end up inviting an IRS audit.
The revenue service knows that timeshares don’t have any value, which may get you into trouble. In fact, the largest nonprofit donation on Timeshare was a fraud.
That is why not all charities consider taking timeshares because they become a financial liability.
But if you wish to give Timeshare away, do some research on how it works. Find a timeshare donation organization that ensures that you don’t have any financial obligations associated with the vacation resort.
Moreover, the Timeshare should follow a 501(c) (3) charity. Find legitimate organizations on the official portal of the IRS.
Also, you may receive a tax deduction on the market value of your Timeshare when donating them.
That is what makes reviewing all your legal documents of timeshare donation extremely important.
At this stage, you may consider hiring an attorney who can review the legalities associated with it.
Check if the Developer Agrees to Take or Buy Timeshare back
Developers usually don’t repurchase timeshares, but some of them may agree to this option. Of course, you will have to put a little more effort into researching or convincing the developers, but they can help you get rid of Timeshare without ruining your credit.
Although there are chances you might not find the company interested in buying back, the option is worth seeing. You may find this out with a call for your vacation resort.
Get Out of a Timeshare the Right Way
When it comes to exiting a timeshare working with professional timeshare cancellation companies that have experience with helping people get out of timeshare agreements, with a proven track record of success is the best option. Simply put, there are no shortcuts in timeshare exit strategies. Getting out of your timeshare using the proper channels and following the legal processes to safely and effectively cancel a timeshare agreement with the help of an expert in the timeshare cancellation industry is crucial to ensuring you have safeguarded your credit ratings both short and long-term.
Conclusion
In a nutshell, many experts consider timeshares or vacation resorts a depreciating asset. If your Timeshare doesn’t appreciate or becomes unaffordable, maybe it is the right time to consider an exit strategy. Remember that the sooner you find a way out, the more cash you will save. Thus, the article includes and explains some smart ways to get rid of Timeshare without having to put your credit at risk.
Exiting a timeshare without ruining your credit rating requires careful planning, legal guidance, and sometimes professional assistance. By following these steps and ensuring all actions are documented and legal, you can successfully exit your timeshare while protecting your financial health.
For more tips on managing timeshare agreements and other financial advice, visit our blog.