Our headquarters are located in Central Florida. PMG works tirelessly helping timeshare owners across the US. We are consumer advocates with 5 star reviews online, and an ‘A’ rating from the BCA.
Primo Management Group | 7200 Lake Ellenor Drive, Suite 201 and 202 Orlando, FL 32809 | (407) 627-1179
If you’re behind in your timeshare payments, you are in danger of timeshare foreclosure. This process can be scary and definitely has severe consequences for you. We’ll break down the process and offer some possible ways out.
Timeshare foreclosure is the legal process where the developer takes back your property because of non-payment of loans, maintenance fees, or special assessments. This happens after you have failed to make your payments for an extended period of time.
Because laws vary from state to state, the foreclosure process also varies. And of course, every timeshare and contract is different. However, foreclosure will likely follow this general process. First, you miss some payments. Maybe your loan or your maintenance fees. Or maybe your HOA levied a special assessment you couldn’t afford or did not pay. Whatever the case, your HOA will try to collect payment. Typically, they use phone calls and letters. In addition, they will apply all manner of late fees. And you will probably lose access to your timeshare during this time.
If you still don’t make payments, they may send you to a collections company. If they haven’t already, you will probably now be reported to the major credit reporting agencies. At that point, your credit score will drop. Then the collections company will attempt to collect payment, and they will likely be quite assertive about it. Consumers find collections to be very stressful, especially if they can’t pay.
If you still don’t pay, then the developer or collections company will initiate foreclosure. In some states, they may first place a lien on your property and then issue a declaration of foreclosure.
There are two types of foreclosure: judicial and non-judicial. With a judicial foreclosure, the company files a lawsuit against you asking the court to grant them the timeshare in exchange for your debt. A non-judicial foreclosure does not go to court. Instead, it relies on existing state processes rather than going to court.
First, you will no longer own your timeshare. In some ways, you may find this to be a blessing However, the other consequences have broader ramifications.
Next, your credit score will drop even further. The exact numbers depend on your score before the foreclosure as well as the credit reporting agency. But the impact on your score will be substantial. A foreclosure on your report will impact your ability to get future credit. And a foreclosure stays on your report for 7 years. Third, you will have to pay taxes on the amount of the debt essentially forgiven by foreclosure.
Because foreclosure has serious consequences, most people want to avoid it. Here are some options.
Talk to your HOA early on. The foreclosure process is complex and they can lose money, so they may be willing to bargain with you. Your best bet it to contact them early on. For example, call them as soon as you get a special assessment you can’t afford or as soon as you lose your job. The more pro-active you can be, the more likely they are to bargain.
Sometimes HOAs will accept a deed in lieu of foreclosure. Essentially, they allow you give back your timeshare without paying delinquent fees. However, not all companies accept deed-backs and all deed-backs impact your credit score, although to a lesser extent than foreclosure.
If you find yourself facing timeshare foreclosure and the company in unwilling to work with you, consider getting a timeshare cancellation partner. These consumer advocates can help you get out of your contract. At Primo, we help people like you every day. Give us a call to see how we can help you exit your contract.
(Image Source: Canva)