What Happens If You Stop Paying Your Timeshare?

You might have stopped paying your loan if you own an unpaid timeshare. If you don’t pay your loans on time, you could face foreclosure. Let us explain the timeshare foreclosure process and how you can avoid it before you worry about your credit score.

How a Timeshare Foreclosure Works

Your timeshare could be forfeited if you fail to pay your timeshare on time, or if you stop paying at all. Foreclosure can be brought against you for breach of contract. The legal process for timeshare foreclosures will vary depending on the state in which you live.

Nonjudicial foreclosures are a notification of default and subsequent negotiation. Judicial foreclosures require that the lender files a lawsuit. If you default on your timeshare payments, you will be issued a lien.

Timeshare Foreclosure: The Consequences

Timeshare foreclosure is similar to residential foreclosure. It can have serious financial side effects. Here are some possible consequences if you’re facing foreclosure on your timeshare.

Credit Score

Your credit score will be negatively affected by timeshare foreclosure. Some people have lost 100 points or more. This means that if your credit score was 700 before foreclosure, it could lead to a 600-point drop, which is considered poor credit. This is a lot of credit lost in one go.

A foreclosure will remain on your credit report for seven year, along with any entries regarding failed collection attempts. A timeshare foreclosure could have a devastating effect on your financial future.

Interest Rates

Timeshare foreclosures can result in higher interest rates when trying to get other loans. This is true even if loans are approved. It is not easy to get lines of credit, personal loans or mortgages after foreclosure. You might want to consider foreclosure if you plan to purchase a large, loan-requiring property in the next seven year.


A timeshare foreclosure could even result in a deficiency judgement. The bank that forecloses on timeshares may seek a personal judgement against the borrower to recover the difference between the total debt and the sale price. If you owe $20,000 on a timeshare but the foreclosure sale nets you $15,000, the bank could ask you to pay $5,000.

After the foreclosure of your timeshare, you may be subject to additional tax. All forgiven debt must be included in your taxable income by the IRS. There are exceptions and exclusions that may apply.


Employers are increasingly checking applicants’ credit scores to determine if they can hire you. While you may be perfect for the job, a timeshare foreclosure could indicate to the hiring manager that your financial management skills are poor. A foreclosure can remain on your credit report up to seven years. This is a long time to have a negative mark on your credit report.

Timeshare Foreclosure: How to Avoid

You can avoid timeshare foreclosure by trying to avoid the many consequences. Although you could sell your timeshare, most timeshares are not worth much. You might try to negotiate with the resort to lower your owing amount. Many timeshare resorts will be eager to make a profit from your misery. Is there a way to stay out of foreclosure?

Timeshare Ninja is the Answer

We can help you avoid foreclosure on your timeshare and save your financial future. Contact us today and get out of foreclosure on your timeshare.

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