The majority of the time the timeshare company will ding your credit. Additionally,although they can sue, sometimes they will not because they will turn around and put yourtimeshare either fixed/floating week or points back into inventory and sell it at market value.This is what the big timeshare companies do. The smaller ones may operate differently they maywant to take it to court to get their money. Try to sell it if at all possible. Even if you take a loss,it is better than taking the hit on your credit. Should you need to buy or refinance a home, youwill regret having done this in the future.
How they are able collect can also depend upon your states laws. The timeshare company could file in civil court to seek a judgment and garnish your wages. North Carolina,Pennsylvania, South Carolina and Texas — do not allow wage garnishment at all except fordebts related to taxes, child support, federally guaranteed student loans, and court-ordered finesor restitution for a crime the debtor committed.
The company might also place a lien on your contract so that if you do sell it, they willget the proceeds. In some cases, your contract may show a default clause where they can sellyour time share and seek legal action for any loss in the sale price. Many times these loans areset up similar to an auto loan. If you have your car repossesed they can still sue you for thebalance due on the loan.
Maybe you are reading this and it is too late. You have been sent to collections for youbalance due. You are trying to clean up your credit, and attempt to pay the timeshare company.They tell you are too late, nothing can be done. You are dealing with the original creditor thatmay have sold the account to a 3rd party collection agency. The collection agency would beentitled to any payments.Check to see if a 3rd party collection agency has the account, if so you’ll have to pay them andnot the original creditor.
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