Timeshares were once considered a luxurious and cost-effective way to enjoy vacations. But many have begun to realize that they may be a financial burden instead. Increasing maintenance fees, special assessment costs, and restrictive usage rights have forced many users to reconsider their decisions and pursue exit paths from the timeshare.
Many owners attempt to get some relief for their debts, and the best way to do that is by cancelling their timeshare. With no timeshare, there is no debt to pay. But cancellation is tricky, and there aren’t many options.
Understanding Timeshare Debt
A timeshare refers to the right to use a property for a specified period each year, essentially a long-term resort membership. The resort fully owns the property, while the timeshare owner only has the right to use the property at a particular time of year. But the resort does not guarantee that the property will be available during this timeframe. There are also many additional costs sour the deal and have people pulling their hair, including:
- Maintenance and Upkeep Costs: These fees and expenses are incurred to maintain the property when unused. The owners often pay upkeep, taxes, and management salaries. These costs increase annually by 5-15%, depending on the property’s use or condition.
- Special Assessments: These are costs incurred for unexpected repairs. For example, the property may be damaged due to storms, severe weather, or renovations. These are passed directly to owners as a hefty bill, but are one-time costs.
- Loan Payments: Many buyers finance their timeshare purchases, since they can’t pay the lump sum in one go. The downside is that they must make monthly payments, which are often accompanied by high interest rates. Timeshare mortgages are structured over 10 years with interest rates nearing 20%, causing many owners to pay double the timeshare cost.
- Exchange Program Fees: Some resorts offer exchange programs for various properties, which come with additional fees.
Failing to pay these costs incurs heavy penalties and puts owners under further financial strain.
Why Would You Seek Timeshare Debt Relief?
Most people don’t realize the full scope of timeshare ownership costs until it’s too late. We have discussed some common reasons someone may seek timeshare debt relief. These include mounting maintenance fees, limited booking slots being available, especially during vacation times, mortgages with predatory interest rates, or an owner may be going through hard times financially.
An owner may also experience major life changes, such as going through a divorce, facing a death in the family, or simply aging to the point where travel may no longer be a viable option. These may render them unable to enjoy the timeshare while still paying the cost. The first step to selecting the right debt relief plan is to understand your motivations for seeking it.
What Are Your Legal Options For Timeshare Debt Relief?
1. Make Use Of The Rescission Period
The rescission period is a set amount of time during which the buyer may cancel a timeshare agreement with zero penalties. Timeframes vary by state, but commonly, they fall between 3 and 15 days. The state specifies the timeframe in which the purchase is made. You must give written notice for this option and act quickly.
Be sure to send the letters via certified mail for proof of delivery and keep copies of all correspondence and receipts. Developers are legally obligated to honor cancellation requests IF they fall during the rescission period. This is the single best option with the least hassle.
Success here means the contract is declared null and void. You don’t own the timeshare, and there is no debt that you must pay.
2. Negotiating With The Timeshare Company
What happens when the rescission period ends? Some options remain on the table, such as by working with a timeshare company. They use pressure tactics such as complaints, public exposure, and other measures against the resort to release the owner from the contract. In a nutshell, they make it costly and inconvenient to keep the owner and chase them. As the resort releases the owner from the contract, it cancels its debt to them. Meaning, the owner does not have to pay their mortgage to the resort for the timeshare, and they get relief from it.
Request options from the timeshare company based on your situation. Common solutions include loan restructuring, temporary deferments, or deed-back opportunities. Being persistent but polite is the key to success with this strategy, but not all companies may be open to negotiations.
3. Deed-Back Programs
Some resorts offer a deed-back program, allowing owners to return ownership of their timeshare to the developers. This releases the owners from any future obligations. Buyers must ensure that their account is current and that there are no overdue fees. Deed-back options are available only to individuals who are current on their mortgage and have no outstanding payments.
Owners receive debt relief by not having to keep making payments for maintenance fees, special assessments, and other expenses.
Depending on the program, there may be a transfer fee or administrative costs, so be aware that you may need to pay these. Not all resorts offer these programs, so check with yours to see if they do. It is the second-best option after utilizing the rescission period. If they do and they agree to the deed-back, ensure that you get the release of liability letter.
4. Selling Your Timeshare
Selling the timeshare on the market is another way to relieve timeshare debt. This method may not always be effective, and the market can be particularly challenging. Demand for such properties is low and even if you do sell it, it will be for a fraction of the cost. But it will provide some relief as you will not have to keep paying off your debt.
The first step is to determine the realistic resale value of the timeshare. Then, create a listing on legitimate websites such as Timeshare Users Group or eBay. The owner negotiates themselves, so the platform or a middleman broker cannot entice them with false promises. Be wary of third-party resale platforms that guarantee sales or demand an upfront fee.
Can You Get Professional Assistance For Timeshare Debt Relief?
Yes, you can hire specialized companies to negotiate on your behalf. Doing so increases your chances of getting debt relief for the timeshare.
1. Timeshare Exit Companies
These are specialist companies that help owners legally terminate their timeshare contracts. They can help you review your contract and use pressure tactics to force the resort to release you from the contract. Essentially, they make it more inconvenient and costly for the resort to keep and chase the owner than to release them. They can also help negotiate with the resort owners and help transfer the resort to a new owner.
When choosing a company, conduct thorough market research to determine if it has a strong reputation. Services like the Better Business Bureau (BBB) are a good place to check ratings and reviews. Opt for companies with high success rates, increasing your chances of obtaining timeshare debt relief. Hire a company that offers a money-back guarantee to get the job done. Some even offer different payment plans, making it easier on the owner.
2. Legal Representation
Alternatively, you can seek the services of an attorney, but we do not advise that unless no other option is available. This is because few attorneys specialize in timeshare law; if an attorney takes your case, it can often backfire.
They also charge by the hour or by each correspondence sent, so owners may have to pay massive fees regardless. Moreover, timeshare agreements are drafted to be airtight, offering little room to exploit, and class-action lawsuits are rarely successful.
So, while legal representation may seem like a viable strategy, it may slow or reverse any progress you have made until then.
Choose Lemon Lion Consulting For Your Timeshare Exit
Timeshare debt can be a massive headache, but it is possible to get some relief. Whether you’re newly regretting a purchase or years into struggling with growing fees, there are viable solutions. You can exercise rescission rights, negotiate with the resort, or hire an exit company like Lemon Lion Consulting to help you find a way out.
Lemon Lion Consulting is a leading timeshare exit company with 20 years of combined experience. It has freed clients from more than $40 million in timeshare debt. Its team of experts provides a range of services, including timeshare cancellation, debt removal, credit monitoring, asset protection, and vacation planning. Lemon Lion Consulting is accredited with the Better Business Bureau and has an A+ Diamond rating.
Contact us today to get a free consultation for your timeshare problems.
