How to Get Rid of a Timeshare Without Ruining Credit

You’ve probably heard the horror stories about trying to dump an unwanted timeshare contract, but there are some ways to make it happen – and without ruining your credit score.

You Can Get Rid of a Timeshare (But You Might Lose Money)

The first thing you need to do is figure out what your timeshare is worth. If your timeshare is valuable or in high demand, it will obviously be easier to get rid of. After that, there are various things you can try to do to get rid of a timeshare from reselling it to hiring a timeshare exit company. But you likely won’t recoup your entire investment unless you have a particularly desirable property.

A few of these options could also hurt your credit score.

Canceling Your Timeshare Won’t Ruin Your Credit

No, if you decide to cancel your timeshare contract, you won’t ruin your credit but there’s a catch – you have to keep paying your timeshare mortgage and annual fees. Keeping the fees up to date allows you to rent the property, and can help you sell the timeshare because it makes the contract more enticing to buyers.

Pro tip: Timely payments on your timeshare won’t show up unless your timeshare company reports to the three major credit bureaus (Experian, TransUnion, and Equifax), so it’s unlikely a timeshare will help boost your credit score.

However, a timeshare foreclosure will damage your credit score, so it’s important that you stay up-to-date with payments until you’ve successfully completed a sale.

READ MORE: How to build credit

Don’t Stop Making Timeshare Payments

There are several options to get rid of a timeshare without hurting your credit, but they all have one thing in common — you need to keep up-to-date on your payments.

Any time you stop making the payments (for whatever reason), your credit score will fall. Late and missed payments will stay on your credit report for seven years.

Any delinquency will be reported to those three major credit bureaus and will significantly lower your credit score. If you own a deeded timeshare, you may face foreclosure if you stop making payments. Any foreclosure (even if it’s not your principal residence) will ding your credit score by 100 points or more.

If you own a right-to-use timeshare, your debt will be handed over to a debt collection agency, and those annoying calls and demand letters will begin. You could end up in court, and if the timeshare management company is awarded a judgment against you, it may be allowed to execute a bank levy or wage garnishment.

Seven Ways to Get Out of a Timeshare Without Ruining Your Credit

There are a few ways to legally get rid of your timeshare without destroying your credit. Which works best will depend on a number of factors, including how long you’ve had your contract, your timeshare developer and how quickly you need to get rid of the property. Do you need a temporary solution, or do you want to get rid of it for good?

Here are the seven top ways to get rid of one without hurting your credit score.

1. Use the Rescission Period

This is the simplest way to get rid of an unwanted timeshare.

The right of rescission is a legal right that lets consumers cancel certain types of home loans, like a, refinance, home equity loan, home equity line of credit also known as HELOC, and some reverse mortgages.

The right to recession gives you three days to rescind an agreement and get your money back. So, act quickly if you feel you want to follow this path.

What Can You Do if the Timeshare Cancellation Period has Expired?

One way to begin to get out of the timeshare contract is to try and have a conversation with the timeshare company or developer. Ask if it can offer any deed-back programs, which will let you return or sell your ownership if you meet certain criteria and requirements.

2. Work With a Timeshare Exit Company

A legitimate timeshare exit company can also help get you out of the contract.

Timeshare exit companies offer services to help owners exit or cancel their timeshares, Many employ a group of lawyers to help with your case.

However, the cost can be high, and you may not get results. Though many timeshare exit companies offer guaranteed exits and cancellations, you need to be sure to research the company and read customer reviews to ensure that previous customers got good results.

Pros of Hiring a Timeshare Exit Company

Working with a timeshare exit company has some key advantages:

It Can Save You Cash

A timeshare exit company may be able to free you of your timeshare contract and you’ll no longer be stuck shelling out thousands of dollars a year on payments and/or maintenance fees.

They’ll Help Decipher Timeshare Contracts

The timeshare industry can be complicated. A timeshare exit company can examine your contract to find any loopholes or problems. An experienced team will be better at breaking down the legalese and be able to assess how difficult it would be to get out of your contract.

The main goal of a timeshare exit company is to try and release you from your contract completely, so you can stop paying for the timeshare and everything that goes along with it.

Pro tip: A timeshare exit company provides different services than a timeshare resale company — provided you sign with a legitimate one. A resale company will help sublet your timeshare contract to other clients, but you will still be under contract and responsible for payments if the unit can’t be rented out.

Cons of Hiring a Timeshare Exit Company

There are also a few disadvantages, most notably the cost.

It could end up costing you a lot of money and take years to resolve your case.

Check the American Resort Development Association and the Better Business Bureau to help locate legitimate companies and only opt for the legit ones.

Check out Credit Summit’s top recommendations.

3. Rent Your Timeshare

If you can’t use your timeshare, advertise it by listing it for rent on a rental site.

There are plenty of families who are looking for rental opportunities that offer the space and amenities of a timeshare property without the hassle of timeshare ownership or a requirement to sit through a sales presentation.

If you can rent it out, you can probably get enough to cover those hefty annual fees.

Pro tip: You can try to rent it out on your own, or sign on with a service. There are a number of companies that focus on renting out people’s unwanted timeshares, particularly if they’re in popular family destinations like Disneyland, Walt Disney World, a popular beach resort area or Colonial Williamsburg.

4. Sell Your Timeshare

You can try to sell the property outright on your own by posting on sites such as eBay, Craigslist, Redweek.com, Timeshares Only and Timeshare Users’ Group. You can also hire a broker.

Pro tip: Before heading down this path, do your research on the resale market to see how much people are getting for comparable properties. Timeshares at highly desirable properties — those owned by companies such as Marriott, Wyndham or Hilton, for example — sell for about 15% of their original price.

If you own a specific week, see if the people who own the weeks before/after yours are interested in an extra week. You might be surprised as they might want to snatch up more time and would be at the ready to take over your time.

5. File Complaints with Regulators and Law Enforcement

Many state and federal agencies investigate consumer scams and frauds affecting timeshare owners and they encourage consumers to file complaints. Bear in mind, these agencies will not help you exit your contract, but if a law has been broken, you may be entitled to restitution and they could help you.

For example, timeshare owners at The Manhattan Club won a high-profile settlement from the developer over false claims. As part of the settlement, the developer acknowledged that it repeatedly misled shareowners about the club’s reservation process, their ability to sell back their shares, and the details of the club’s state-approved offering plan.

6. Give or Sell It Back to the Timeshare Developer

Some timeshare companies will take the timeshare back or allow you to sell the unit back at a discounted price. Yes, you’ll lose money, but you won’t have to worry about the annual fees or other hassles of the timeshare contract. If you own a Bluegreen timeshare, for example, there is an option to give it back to the developer.

Does Your Contract Have a Deed-Back Clause?

If your contract has a deed-back clause, this means you can return the ownership rights or timeshare to the resort or developer. However, you will need to meet the conditions stipulated in the contract and follow it from start to finish.

No money will be involved and any equity you may have built up through the timeshare is forfeited.

How Deed-Back Programs Work

Check your contract to see if it supports a deed-back program. Eligibility differs depending on the developer but most resorts or developers will mandate that all charges must be paid in full. Some require an upfront fee; others may offer to buy it back at a fraction of what you paid.

7. Ask your Developer for Help

If you’re struggling financially, the developer may offer a relief package. Ask if it can offer you some type of loan deferral options or other financial assistance that could help while you work to get rid of your timeshare. This can be particularly effective if you experience sudden financial hardship, like a job loss or illness.

How to Write a Timeshare Cancellation Letter

When you cancel your contract, you’ll need to put everything in writing. Include the following:

• The date
• Name of the timeshare company
• Names on the timeshare contract
• Your address, phone number, and email address
• Contract number
• Date of purchase
• Brief description of the timeshare
• A statement of cancellation

Pro tip: Make sure to keep a copy of the letter and send it through certified mail with proof of mailing date and receipt. Here’s a sample link on how to create such a letter if you need help.

What is the Average Cost to Get Rid of a Timeshare?

It can be difficult to come to terms with the fact that you will almost certainly lose money on your timeshare.

The costs vary and timeshare exit companies don’t typically publicize how much they charge. According to customer reviews posted online, it will cost $3,000 on the low end up to a high of $14,000.

According to data from Timeshare Exit Team, the average cost is about $4,000. This includes the annual maintenance fees, closing costs, broker fees, and lawyer fees. It will be even more costly depending on the number of contracts you have.

A new contract is added to your timeshare every time you change or upgrade your timeshare agreement. When you try to get out of a timeshare, every one of the contracts must be canceled. Multiple contracts mean higher costs.

What to Consider If You Want to Get Rid of a Timeshare

There are a few issues to consider before you choose an exit strategy:

• Annual costs: A timeshare’s average cost is about $22,942, according to the American Resort Development Association (ARDA). There will be annual fees, which can range from $900 to $3,000 a year. Plus, you may still be making mortgage payments on the property.
• Depreciation: Like most things, timeshares lose their value over time. If you decide to sell your timeshare, you will get a lower resale price than what you initially paid.
• Is it causing financial hardship? If your timeshare payments and fees are causing legitimate financial hardship, it’s worth doing what you can to either get rid of the property or contact your developer to see if there are any relief programs available.
• Is it a desirable property? Timeshare resale can be difficult if there are hundreds of similar properties on the market. But if you have a particularly desirable property or week (think Disney over school holidays), you’ll have an easier time reselling the property.

Is It Worth It to Get Out of a Timeshare?

If you’re having financial problems, aren’t getting your money’s worth out of the annual fees or simply don’t want to keep visiting the same properties year after year, it’s worth it to exit. Even if you lose some of the purchase price, you’ll no longer have to deal with annual fees.

Watch Out for Scams

Scams abound, so be prepared like taking the time to double-check any correspondence you receive from anyone claiming to represent a timeshare opportunity. Is their email address legit? Do they have a solid reputation and positive customer reviews?

Pro tip: Many scammers will ask you to help cover the costs and fees associated with the buying and the re-selling process, and they will require that you pay an upfront fee. These are red flags that you hope to avoid from the get-go.

Protect Yourself

• Read the contract
• Verify the company you choose to work with
• Don’t pay money upfront
• Hang up on anyone who promises you a guaranteed exit strategy

Want to learn the truth behind timeshare scams? Watch this video:

The Bottom Line

Timeshares originally sound wonderful, but vacation ownership can quickly weigh you down. Timeshare sales professionals are experts at making it sound like a dream come true, but then a few years later you find yourself trapped. If you can’t afford the annual fees or find that you aren’t using the property, it may be time to try and get out of your timeshare contract. But there are options that won’t damage your credit score.

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