Not Paying Timeshare Maintenance Fees: The Consequences

What follows when timeshare maintenance fees go unpaid?

The timeshare does not go away. The unpaid balance grows with interest, late fees and collection costs, the resort can shut you out of reservations, the debt can land on your credit report for up to seven years, and for a deeded timeshare the association can foreclose its lien or sue you for the money. If any of the debt is later forgiven, the IRS may treat it as income. This page lays out those consequences so owners know what is at stake; it does not recommend stopping payment, and it lists the routes to check before any payment is missed.

Which owners fall behind on timeshare fees?

Owners whose fee outran their budget. ARDA, the developers’ trade group, reported in an Ernst & Young study that the average fee per weekly interval climbed 38% between 2021 and 2025, to $1,550, with a 4.7% rise in the final year alone. Marriott Vacations Worldwide told investors that when it added to its sales reserve in 2024, it believed inflation and the fee increases of 2023 and 2024 were driving continued elevated delinquencies and defaults. ARDA’s study counted about 93% of fee accounts as current in 2025, which leaves roughly 7% that were not.

Owners the developer turned down. Developers are usually under no legal obligation to reclaim a timeshare, and their exit programs carry conditions. A refusal, followed by another increase, is a common starting point.

Owners someone told to stop. Reed Hein, according to Washington’s attorney general, sometimes directed customers to quit paying their resorts. A 2019 federal order in a Westgate case describes owners who bought a Westgate timeshare in 2007, asked Westgate to buy it back in 2010 and were refused, tried at least two resale companies, and were later told by an exit company to cease all payments.

Disclosure: Candid Timeshare works with Vacation Ownership Consultants, a timeshare exit firm, and may be paid when readers hire it.

Owners who read it online. Vacation Ownership Consultants (VOC), a timeshare exit firm, says many owners it has talked to put off getting professional help after being told online to “just stop paying.” In its telling, several later got a collection agency notice that rolled years of fees, late charges, collection fees and interest into one bigger balance, while their credit-monitoring service flagged a score drop and a newly opened collection account.

What your purchase documents already warned you about

Florida requires the public offering statement every buyer receives to say that the duty to pay assessments lasts as long as you own the timeshare, and that someone who inherits a timeshare interest becomes responsible for those assessments. It must also state, in conspicuous type, that the managing entity holds a lien for assessments, taxes and special assessments, and that missing required payments “may result in the judicial or trustee foreclosure of an assessment lien and the loss of your timeshare interest.” The same statement tells buyers they can object to the trustee route and force the managing entity into court.

Texas sets similar expectations for exit companies. Its 2015 law requires the contract of a company handling a timeshare transfer or termination to warn, in capital letters, that the owner’s duty to pay fees, assessments and taxes “DOES NOT CEASE” because the owner signed with that company.

What happens, stage by stage, and how long does it take?

Contracts and states differ. Florida writes its process into statute in detail, so it serves as the model here.

Stage	What the law allows	Timing in Florida
Interest and late fees	Interest up to the highest lawful rate, a late fee of up to $25 per delinquent assessment, and collection agency and attorney’s fees, all secured by a lien	From the due date
Lost use	The resort may deny use, refuse reservations and cancel confirmed ones	Once 60 days have passed after billing or the due date, whichever is later
Collections	The managing entity must first warn that collection fees may be charged to you and a lien may result	At least 60 days before the account goes to an agency
Credit report	Seven years of reporting for an account placed in collection	Counted from 180 days into the delinquency
Lien	The managing entity holds a lien for each assessment	From the date each assessment is due
Trustee foreclosure	Notice of default and intent to foreclose, then a recorded and published notice of sale, then a public auction	Sale only after at least 30 days from perfected notice, and at least 30 calendar days after the notice of sale is recorded
Court action	Judicial foreclosure, a money judgment for the unpaid assessments, or both	On the managing entity’s timetable

A few details carry weight. You can cure the default and redeem the timeshare at any point until the trustee issues the certificate of sale, and after that the right to redeem ends. Florida’s legislature wrote into the timeshare act its recognition that nearly all timeshare foreclosures are uncontested. And in a letter quoted in a federal case, Westgate’s attorney said defaulting owners would face lawsuits, adding that his clients would pursue money judgments rather than foreclosures.

Credit damage can outlast the event. Per Washington’s attorney general, some Reed Hein customers believed their exits were done, then found out months or years later that the resort was still owed money, with some accounts possibly referred to collections. One, a reverend who stopped paying on the company’s advice and missed the resort’s collection case while overseas, said in a declaration that the lower score kept his family from even looking into buying a house.

Can a resort foreclose and still collect a deficiency?

It turns on the state and the procedure.

State and route	Can the lienholder pursue a deficiency?	Source
Florida, trustee foreclosure of an assessment lien	No; the sale releases the owner from the amounts the lien secured	Fla. Stat. 721.855(8)(c)
Florida, court action by the association	The managing entity may foreclose and also sue for a money judgment for unpaid assessments	Fla. Stat. 721.16(2)
Florida, court mortgage foreclosure generally	A deficiency decree is within the court’s discretion	Fla. Stat. 702.06
South Carolina, trustee foreclosure	No deficiency judgment as to the lien foreclosed	S.C. Code 27-32-350(C)

Florida’s trustee notice tells the owner directly that accepting the trustee route means no deficiency judgment, even if the auction falls short of the debt. Objecting sends the matter to court, where a money judgment becomes possible. Other states differ, and our foreclosure page covers the mechanics.

A purchase loan is a separate track. Marriott Vacations Worldwide says it turns away payments during foreclosure unless they bring the note completely current, and that it writes off the loan once it holds title again, by foreclosure or by deed in lieu. Hilton Grand Vacations treats a loan as in default at 121 days past due.

Points and right-to-use memberships without a deed may follow different rules, but unpaid fees are still a debt that can go to collections.

Will you owe tax on a forgiven balance?

You might. In the IRS’s general rule, debt that is canceled or forgiven for less than what you owed becomes taxable income, and certain creditors report cancellations of $600 or more on Form 1099-C. When a creditor forecloses on or repossesses secured property, you are treated as having sold it, and the tax result turns on whether you were personally liable for the loan. Some exclusions apply, including insolvency; the home-mortgage exclusion does not fit a timeshare, and Publication 4681 limits it to discharges before 2026 anyway. A creditor that keeps collecting after issuing a 1099-C may not have canceled the debt at all, the IRS notes. Show any 1099-C to a tax professional.

Does stopping payment make the developer take it back?

A federal court has answered that. In its 2019 order in Westgate Resorts v. Sussman, the U.S. District Court for the Middle District of Florida held that an exit lawyer acted wrongfully and fraudulently by telling owners to halt payments on the pretense that this would free them from their timeshares. The court pointed out that owners were never told Westgate did not accept his methods or grant his clients deeds in lieu of foreclosure.

The same order shows the developer’s side of the table. According to Westgate testimony quoted there, the company negotiates case by case, usually when an owner raises a hardship, through an application with supporting documents; if the hardship is accepted, the settlement typically includes a fee, after which Westgate would accept a deed in lieu of foreclosure. Otherwise, per that testimony, the owner is left to keep paying or default, with “the possibility of a foreclosure and judgment.”

Each developer program sets its own conditions, and an account in default may not meet them. Ask about the program while you are paid up, and get the answer in writing.

An exit company told you to stop paying. Now what?

Walk away from that company. Stop-paying instructions are on the FTC’s short list of exit-scam signs. Texas law makes it a deceptive practice for a firm offering timeshare transfer or termination services to urge an owner to quit paying the developer, association or managing entity in violation of the owner’s obligations, and it requires such firms to try in good faith to finish the job within 180 days of signing. Minnesota’s attorney general cautioned in 2025 that some exit businesses set owners up to stop paying so a foreclosure follows, which can pile on costs and damage credit.

Some companies count a foreclosure as a win. Washington’s attorney general said Reed Hein’s money-back guarantee excluded customers facing or past foreclosure because it treated foreclosure as a successful outcome, and its 2021 settlement obliged Reed Hein to warn customers that certain of its exit methods could end in foreclosure. If a company gave you stop-paying advice, file reports with ReportFraud.ftc.gov and your state attorney general, and hold on to the paperwork.

Routes to check while your account is current

1. A recent purchase. If you signed lately, check the rescission deadline tool. Inside the window, cancel in writing now.
2. An inheritance. If the timeshare came to you from an estate and you haven’t accepted it, ask an estate attorney about disclaiming it before you use or pay anything.
3. The resort and the resale market. Write to the developer or management company asking for its surrender or deed-back program by its official name, the fee and the conditions, and check completed sales of comparable weeks. That matches the FTC’s advice to “start by contacting your timeshare company directly,” and the first step of VOC’s published process. Wyndham’s Certified Exit page tells borrowers who can’t afford their fees to call, and lists a hardship exception. Hilton Grand Vacations’ Member Solutions page describes spreading missed loan payments out, deferring them, or changing the loan’s terms. Expect a sales pitch: existing owners accounted for 61% of 2025 sales volume in ARDA’s study. Sign nothing on the call or at an owner update. An upgrade adds debt and ends nothing, so an offer to sell you more counts as a refusal.
4. Developer timing rules. Horizons, Holiday Inn Club Vacations’ program for mortgage-free owners facing hardship or health problems, shuts out owners once it spots an outside exit company on the account; apply first and hold its written decision before you speak to any exit firm, even for a free consultation. Wyndham wants to be the owner’s “first and only call” and warns that outside help may leave options “limited or nonexistent,” so get its answer in writing first. For Westgate, Rebecca Tushnet’s law blog reports an exit company’s allegation, in a case decided in 2024, that repossession has hinged on an owner’s sworn statement of no dealings with “any timeshare exit company, lawyer or law firm”; Westgate denied it covers all lawyers, and the court called the wording “sweeping.” Ask the Legacy Program in writing whether it applies before approaching an exit firm.
5. A special assessment or a failing resort. If a special assessment or a sale vote at a legacy resort is behind the decision, read those pages first.
6. The loan. Few lenders will refinance against a timeshare, because it resells for very little. A personal loan can replace the developer loan if you qualify for a lower rate; see the loan payoff page.
7. No resale value and a refusal. VOC’s consumer guide describes owners who followed online “just stop paying” advice and later faced collection notices. When the resort says no or wants a price beyond reach, and the week has no buyers, consider a free consultation and file review from a timeshare exit firm while you are still current. At VOC, you submit billing statements, the purchase agreement and any deed through its eligibility form, VOC checks what your ownership may be eligible for, and a free file review follows. Whether to sign up for its one-time flat fee is a later, separate decision. Its home page says billing doesn’t come up until it has confirmed you qualify, and that its consultations are “supported by seasoned industry partners and experienced timeshare attorneys.” Don’t assume every firm’s review is free. Other routes: a lawyer of your own when there is a documented claim, or a licensed broker charging nothing upfront when buyers exist. Compare any firm against the red flags page and our guide to exit companies.

Run your figures through the exit cost calculator first.

If you are already behind

Respond in writing rather than letting notices pile up. Ask the association or developer about a payment plan or hardship terms for the arrears (Hilton Grand Vacations’ Member Solutions page, for one, describes spreading missed payments over time), and whether it would take a deed in lieu of foreclosure or agree to a negotiated release. Developers do reclaim timeshares by deed in lieu, as Marriott Vacations Worldwide’s filing shows. Get any agreement on paper, then check that the deed was actually recorded.

Open every envelope. A Florida trustee’s default notice includes an objection form, and the choice to return it or not shapes everything after, so get advice from a lawyer admitted in the resort’s state before mailing it or letting the deadline lapse.

Disclosure: Candid Timeshare works with Vacation Ownership Consultants, a timeshare exit firm, and may be paid when readers hire it. This page’s author, Kira Fairbank, is a manager at Vacation Ownership Consultants. We cite its published case data on this page where marked.

This is general information, not legal advice, and few timeshare topics carry higher stakes. Foreclosure rights, lawsuits over a balance and the tax effects all vary with the contract, the state and your own finances. See a lawyer admitted where the resort is located, and a tax professional, before any payment is missed.