What Happens If You Stop Paying a Timeshare? Hidden Risks, Credit Damage, and Legal Consequences

For thousands of Americans, timeshares are sold as a dream: a private slice of paradise, a guaranteed vacation every year, and a supposedly smart long-term investment in leisure. But reality often arrives faster than the welcome brochure promised. Hidden fees appear, sales pitches turn out to be misleading, and promises evaporate—leaving you stuck, frustrated, and betrayed. Confronted with escalating bills and a company that refuses to help, it’s no wonder many owners see one “obvious” solution: stop paying.

What happens next, however, is rarely simple—and can be devastating.

A Growing Financial Snowball

For owners who fall behind on their timeshare loans or maintenance fees, the consequences often begin quietly—but escalate quickly. A missed payment triggers late fees and default interest, which can grow the balance far beyond the original loan.

“People think skipping a payment is harmless,” said financial advisor Linda Harper. “But by the time they catch up, what they owed has often doubled.”

The Harassment Begins

Once a payment is missed, the timeshare company—or its collection agency—will begin a relentless pursuit. Owners report daily calls, repeated letters, and emails warning of legal action. Accounts can be handed to third-party agencies whose entire business is to recover delinquent balances.

“It was constant,” said John M., a former timeshare owner in Florida. “I couldn’t answer the phone without another collection call waiting.”

Credit Scores and Life Beyond the Timeshare

Defaulting on a timeshare loan can also hit the broader financial picture. Payments in default are reported to credit bureaus, drastically lowering credit scores. Negative marks can remain for seven years, complicating everything from mortgages to car loans and credit cards.

“People underestimate how deeply it can affect their financial life,” said Harper. “A timeshare isn’t just an extra expense—it can become a serious barrier to borrowing in the future.”

Losing Access to the Very Property You Own

Ironically, stopping payments often means losing the ability to use the timeshare itself. Resorts typically block defaulting owners from booking, exchanging, or renting out their units. The dream vacation property quickly becomes an unused liability.

Foreclosure, Lawsuits, and Wage Garnishment

In many cases, timeshares are considered real property. Lenders or associations can foreclose or terminate ownership, reclaiming the property for resale. And if the sale doesn’t cover the remaining balance, owners can be sued for a deficiency judgment—sometimes resulting in wage garnishment or bank levies, depending on state law.

Long-Term Financial Fallout

Even after the timeshare is gone, the consequences can linger. A foreclosure or default can make future loans more expensive—or entirely inaccessible. The mark of a timeshare default can affect housing applications, car loans, and even credit card approvals for years.

The Takeaway

Stopping payments may seem like an easy exit strategy—but for most owners, it’s a trap that grows more dangerous with time. Financial advisors urge owners to explore legal and professional options for timeshare relief before taking drastic steps.

“The best course is to act early,” Harper said. “Once you stop paying, the consequences accelerate, and it’s very hard to reverse the damage.”