Here's What Happens if You Stop Paying Your Timeshare Dues

It's not a great situation to land in.

The idea of a timeshare can be quite appealing if there's a specific vacation area or community you like to visit each year and you want to be guaranteed a place to stay during your travels. But buying a timeshare is not an inexpensive endeavor. In addition to the cost of your timeshare itself, which you may need to raid your savings account for, you'll also face ongoing maintenance costs.

Dave Ramsey says timeshare dues come to $1,000 a year on average, but they also have the potential to rise over time. And if you don't keep up with those dues, you may not like the consequences.

When you don't pay your timeshare dues

When you sign a mortgage, you're entering into a contract that requires you to keep paying your lender or otherwise, eventually, risk losing your home. Timeshares work similarly. When you sign a contract to purchase a timeshare, you're committing to paying your timeshare dues in a timely manner. If you don't, you'll be in violation of your contract, and from there, a host of consequences could ensue.

At a minimum, you might be penalized financially for being late with your timeshare dues. And if you don't get current, your timeshare management company might send the matter over to a collections agency.

Once that happens, you can bank on a series of persistent letters and phone calls from people whose job it is to make sure you end up paying what you owe. Also, once you reach the point of the matter being sent to collections, you risk major credit score damage. That could make it difficult to borrow money the next time you need to.

Eventually, if you let things drag on long enough, you'll likely lose access to your timeshare for not paying your dues. You can think of it as a foreclosure of sorts. Granted, it's not the same thing as your primary home being foreclosed on, because that's a property you don't share with other people. So in this case, a bank won't repossess your timeshare and sell the entire building. Rather, your timeshare company will probably have the right to revoke your ownership and sell your timeshare to another buyer.

What to do if you can't pay your timeshare dues

It's possible you might encounter some financial difficulties that make it tough, or impossible, to keep up with your timeshare dues. If that's the case, don't ignore the problem -- that's probably the worst thing you can do.

If you want to keep your timeshare, talk to your management company about options. It may be willing to give you a grace period for paying those dues.

Otherwise, selling your timeshare is a good way to get out of that situation without causing damage to your credit score. Finding a buyer for a timeshare can be tricky, though, so you shouldn't expect that sale to happen right away.

All told, when you buy a timeshare, you commit yourself to paying timeshare dues. And so you shouldn't expect to get off easy if you stop making those payments. The more proactive you are about addressing the issue of not being able to pay your timeshare dues, the less financially painful the situation might be.