Can Foreclosure on a Time Share Count as a Foreclosure?

Timeshares allow several users to share a property. Each person receives a specific time of this year to use the property for his holiday. When you stop making payments on a timeshare, the lender attempts to recover its money. The method used to recover is based on the sort of timeshare where you have an interest. Timeshares come in two types: deed contracts and right-to-use properties.

Deeded Contracts

Having a deeded contract, you have part of this property. If you funded your purchase, you’re have to pay the lender each month until you cover the purchase price off. Defaulting on the loan allows the lender to use other ways to recover its money. In this example, your lender uses a foreclosure proceeding to take back your ownership at the property and recover the money that you borrowed to buy the property.

Right to Use

Right-to-use timeshares don’t give real property ownership to the members. Instead, you obtain the right to use the property during a specific week of this year. As you don’t have property rights or a deed of trust, the lender cannot pursue foreclosure proceedings to recover the money that you borrowed. Rather, the lender must use other collection efforts such as collection agencies or suing you in civil court.


Your lender plans a Foreclosure Avoidance Assessment before starting foreclosure proceedings. At this assembly, the lender discusses your alternatives to foreclosure including repayment arrangements, loan modification or selling the property. You may designate a attorney, credit counselor or other financial advisor to speak with the lender for your benefit in the FAA assembly. Approximately 1 month following the FAA assembly, the bank records the Notice of Default using the county. You get 90 days to bring the account current. After 90 days, the lender issues the Notice of Sale. You have three weeks prior to the auction. You’ll save your timeshare by paying your bill anytime as many as five days prior to the sale.


Having a foreclosure on your record, your credit report and score suffer. Your credit score falls up to 160 points having a foreclosure on your own record. Inadequate credit affects your ability to get other loans also frequently raises insurance premiums. You do not qualify for another mortgage loan to get at least three to five years from the date of the foreclosure. You may have to pay additional taxes on the remaining balance on the timeshare involving the total owed and the number the timeshare sold for at auction.

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