Timeshare Foreclosure Consequences
One of our users left the following comment on our “What Happens If I Stop Paying My Timeshare?” article in response to another person’s comment:
“I agree and have a Westgate time share and am going through similar problems and feel scammed…. My biggest question and concern is: If I “walk away and don’t pay” and let foreclosure happen on the time share can Westgate go after other properties I own? Im not worried about the credit scar, but am worried that liens can be put on my other property. Does anyone know the facts about how far they can go if you “Walk away and don’t pay”?”
The “walk away and don’t pay” concept is a tricky one. While there have been many instances of people walking away from their timeshares with no consequences, not paying the fees does often result in foreclosure, which has very serious consequences. Remember that timeshare is treated equally to real estate in the eyes of the law. Timeshare foreclosure can therefore be just as detrimental to your credit score as foreclosure on any other real estate property, following you for up to 7 years!
Aside from damaging your credit score, you can run into trouble if a mortgage lender obtains a deficiency judgment against you. When a lender forecloses on a mortgage, the lender then obtains possession of your timeshare property and sells it at auction. Since timeshares rarely sell at auction for the amount owed on the deed, the lender has the option to take legal action and sue you for the remaining balance owed, called a deficiency judgment. The mortgage lender can get a judgment lien against your personal property and other real estate you own within the county, giving it a security interest in that property. With a deficiency judgment lien, the creditor also has an interest in any personal property you owned at the time it filed the judgment, including jewelry, equipment, business assets, art, antiques, electronics, and any other valuables. Even further, mortgage creditors may garnish your wages (take part of your employment income) and/or attempt to levy your bank accounts.
So, yes, the bank–not Westgate or any other timeshare company–can go after other real estate properties (along with personal property, income, bank accounts, etc) you own. In short, try to avoid foreclosure if possible. If your timeshare is foreclosed, however, and the mortgage lender obtains a deficiency judgment against you, pay what you owe! It might not feel right, but it’s certainly better than having the bank go after your other assets. The takeaway is this: there is no way to predict what will happen if you “walk away and don’t pay” but be aware that you risk foreclosure and possibly a deficiency judgment.