Canadians and U.S. Timeshares

One of our users left the following comment on our Westgate Timeshare Orlando article in response to another person’s comment:

“We are seriously considering walking away from our TS with Westgate. We are not so concerned with our credit rating since we are Canadian and the banks and creditors here tend to look at your payment history as a whole and these types of “blemishes” don’t seem to bother us much if you can offer a valid argument. That being said, I have checked and Westgate is not listed as a creditor on our credit reports. My question is (and I don’t know if you can answer this), can we be denied entry into the U.S. for this?”

canadiansAn age-old question in the timeshare world is what will happen if you walk away and don’t pay. Unfortunately, there is no concrete answer to this question. Some people have walked away from their timeshares with no consequences, while others take a major hit to their credit score. But more often than not, if you walk away and stop paying the fees, your timeshare could go into default and eventually foreclose.

So now the question is if a timeshare foreclosure could bar a non-U.S. citizen (Canadian, in this case) from entering the U.S. The answer is probably not. You could possibly run into trouble if your mortgage lender decides to sue you for the money you owe–called a deficiency judgment–but only if it rises to the level of a criminal offense, which is unlikely. Even if they did file a criminal suit against you, that would not necessarily mean automatic denial into the U.S. So, you are probably safe to continue to travel into the U.S. following a foreclosure on your timeshare property, but it is wise to not let it reach this point. You might try some of these options before simply walking away.

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!

foreclosure consequencesAside 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.

Marriott Surf Club Aruba – International Foreclosures

We received the following comment from one of our users:

Help–I haven’t paid my maintenance fees or renewal fees since October. I cannot afford it anymore since my husband passed away…I spoke with a rep who stated it was international and would not affect my credit too much, my name would just be in the back of the newspaper. Then another rep said the complete opposite. The sad part is I didn’t owe too much more but now with late fees it adds up. Please help me find a reputable person to take this off my plate!

As with any other timeshare contract that has passed its rescission period, you have three options that will not affect your credit score: sell, transfer, or donate. You can read more about each of those options here. If you are unable to sell, transfer, or donate your timeshare and do not keep up with maintenance or renewal fees, you are at risk of foreclosure. At this point you might try pursuing a deed-in-lieu of foreclosure, which will not affect your credit score as severely as a foreclosure would. It is ultimately up to Aruba law and the timeshare company if they will accept a deed-in-lieu of foreclosure.

international foreclosures

An international timeshare situation will be a bit different than a timeshare in the U.S. because while most U.S. states have laws that strictly regulate timeshares, those laws to do not apply to a timeshare in a foreign country. Remember that there are likely different legal requirements for selling, transferring, or donating a timeshare in countries outside of the continental U.S as well. Be aware, however, that if your international timeshare is foreclosed on, it will still hurt your credit score. Consequences of foreclosure are the same regardless of where the property was located. If you find yourself stuck in this situation, it is best to contact an attorney who is familiar with the laws that govern timeshares in that particular country to avoid any miscommunication or legal troubles.