Is One's Credit Rating Affected by Defaulting on a Mexican Timeshare Purchase?

[buzglyd]

Bill is gonna need a chiropractor after moving those goal posts.

 

[easyrider]

Bill is gonna need a chiropractor after moving those goal posts.

So do actually think that your credit report takes a ding when you stop paying on a Mexican timeshare or are you just playing the devils advocate ? Really, all you have provided in this thread are your opinions and comments about me. Neither are that interesting.

Bill

 

[easyrider]

I guess what it comes down to is that when you buy a timeshare, that payment history is not required to be reported to the consumer reporting agencies like Equifax, so I think most are not reported , especially those in foreign countries because these foreign companies are not members of any of the consumer reporting agencies in the USA. To actually report a delinquent payment the report has to include the payment history to be complete as required by the Fair Credit Report Act. Both positive and negative payment history is required. If a company only reports the non-payment history, without the full payment history, it would be easy to dispute because of a lack of information and the reporting company could be reported to the Federal Trade Commission who enforces the Fair Credit Report Act.

So if you do see a timeshare payment history on your credit report, that company that is reporting the payment history can absolutely report non-payment and ding your credit. Creditors that do not report payment history need to get a judgement to ding your credit.

Bill

 

[Blaaamo]

What if you purchased from a US corporation that is operating a hotel in Mexico, ala Westin Lagunamar?

 

[easyrider]

What if you purchased from a US corporation that is operating a hotel in Mexico, ala Westin Lagunamar?

I'm not certain about the Westin, but with most American based resort chains that operate in Mexico, the buyer is financed through a line of credit, like a credit card, from an American lending institution. Like a bank that offers credit cards for the resort chain. Payment history for these do show up on consumer credit reports like any other credit card or line of credit.

The maintenance fee is a different story. It typically is not reported to cra's. For missed maintenance fee's, generally, the resort will try to contact the person, by mail or email usually. Eventually a certified mail is sent and if there is no response, the account is locked out and later closed. This is just a generic version of what happens as the process is likely different depending on circumstances, location and company policy.

Bill

 

[ConcernedTimeshareOwner]

Yes, I know this. I use resortcom.com to pay my MF for my Mexican timeshares. What matters is "where" the product was bought. If you bought a Mexican timeshare while in the USA then that company would be doing regular business in the USA and could easily get a judgement. Even so, that doesn't require the debtor to actually pay.

If you buy a product in Mexico and quit paying the company that owns that product, that company can not force a judgement in the USA. If they can't get a judgement then they can't get a collection company to call you or hit your credit report with a derogatory remark because they need the judgement to get a collection order.

Bill

Can they pretend as though you purchased it in the US? Suppose the documents that you signed have some sort of fine print claiming that the transaction was made in the U.S.?

I know my question is odd...but the salesperson lied so much that I don't doubt the untruths could continue should we decide to stop paying.

 

[Passepartout]

A Can they pretend as though you purchased it in the US? B Suppose the documents that you signed have some sort of fine print claiming that the transaction was made in the U.S.?

C I know my question is odd...but the salesperson lied so much that I don't doubt the untruths could continue should we decide to stop paying.

(A) 'They'- whoever that is- can pretend whatever they want, but that doesn't make it so. (B) That would be fraud. (C) Yes, the question is odd. Timeshare salesweasels lie. The salesman would be in no position to know whether or not you are paying, nor could they do anything about it.

You are manufacturing groundless things to worry about. Just STOP.

Jim

 

[easyrider]

Can they pretend as though you purchased it in the US? Suppose the documents that you signed have some sort of fine print claiming that the transaction was made in the U.S.?

I know my question is odd...but the salesperson lied so much that I don't doubt the untruths could continue should we decide to stop paying.

It seems that all credit card payments and lines of credit associated with these credit card companies are reported to the credit reporting agencies in the USA. I know that American resorts with property in Mexico have access to consumer credit. Usually the buyer is approved through their ( Hilton, Marriott, Starwood and the likes) credit programs which are USA based credit companies. Credit is very regulated regarding these companies that have access to it .

For Mexican based resorts that finance their products without USA credit companies they really can't report to the credit reporting agencies in the USA unless they are set up with credit in the USA. If you look at your credit report you can see who is reporting.

The credit reporting is for the purchase of the timeshare, not the maintenance fee. The MF is usually not reported because it is owned by the developer.

It wouldn't surprise me to see some shenanigans regarding small timeshare resorts in Mexico. They have no other way to enforce their policies other than deception or spending money that often results in non-payment anyway, imo.

Bill

 

[wrobinson]

I am a former timeshare sales rep who worked in Mexico for many years. If you purchased a timeshare in Mexico, chances are, it is illegal by nature. The Caribbean is the same.

For example: Unlimited Vacation Club contract states that you have a contract with "the mediator," not with unlimited Vacation Club. The mediator is a Mexican national who is supposed to be operating in Panama. he is no where to be found and does not show up on any records in Panama. He did not sign the document. They did not produce a power of attorney, and therefore, the contract is voidable.

Unlimited Vacation Club does not have a business licenses to operate in Mexico. They hide behind the skirts of AMResorts (Secrets, Now, etc.)

If you have any legal issues, according to the contract, it is only with the mediator in Panama. You must go to Panama, not the U.S.

Although Unlimited Vacation Club does have its headquarters in Florida, you do not have a relationship with them, according to the contract. all they do is service the customers for the "mediator." Therefore, they cannot legally report you to any credit bureau. The purchase was made in Mexico and it does not follow you back to the U.S.

The sales management and sales staff who signed the contract do not have the legal right to sign the contract as they do not work for any of the clubs and are not resp for the club. They also do not work for the "mediator." They work for a pay company, a separate entity. The contracts they sign are voidable.

Read your contract thoroughly. There is nothing you can do. Period.

Visit this website and there are free timeshare contracts to read for free. www.everythingabouttimeshares.com

if you have any more questions, feel free to ask here on this site or my personal email: wcrobinson1973@gmail.com

 

[easyrider]

I am a former timeshare sales rep who worked in Mexico for many years. If you purchased a timeshare in Mexico, chances are, it is illegal by nature. The Caribbean is the same.



Read your contract thoroughly. There is nothing you can do. Period.

I think you meant " There is nothing they can do". I agree with you for the majority of international timeshare properties but some companies in the USA offer people visiting their USA based resorts international property a membership to their branded vacation systems in the USA and use financing from American finance companies. These companies that offer this financing usually do report to cra's because it is a line of credit from an American finance company for a product based in the USA.

Worldmark by Wyndham and Vacation Internationale both sell and finance memberships to people visiting their properties in Mexico. These payments are reported.

Your website is very informative. I enjoyed browsing through it. Thanks Wayne !!

Bill

 

[s0nginmyheart]

Reviving an older thread... have the same question as OP, but specifically for Diamond Resorts...

We bought Diamond Resorts timeshare at Cabo Azul, Mexico. The agreement is with DPM Acquisition Mexico, S. DE R.L. DE CV... "the legal entity in charge of selling and managing the timeshare program." There's another page for "The Club Membership" which is with Diamond Resorts International Club, Inc. a Florida Corporation (I believe this is the exchange).

Because we purchased all of this is Mexico, even though Diamond is US based... what's the repercussion of stopping our payments and just "walking away" (still have a balance on loan). Again, specifically for Diamond Resorts... All the responses here seem to conflict. Strangely, my husband does not see Diamond on his credit reports (all 3 agencies)...

 

[LannyPC]

All the responses here seem to conflict

Yes, I know it is a little frustrating trying to get a straight, clear answer to this question. But unfortunately, circumstances vary so there is no one-size-fits-all answer to the million-dollar question. And, as far as I have seen or not seen, no one who has actually defaulted on a Mexican timeshare purchase has come on this thread and reported in detail what has or has not happened.

That being said are you looking for the answer(s) so that you can weigh your options? IOW, are you thinking "I'll just default if the consequences are not that bad but if they are more severe, then I will pay the debts"?

 

[TUGBrian]

as mentioned...even if some folks report "result A" happened...there is no real guarantee that you wont see "result B" if you do the same thing.

I would say that the chances of a US based company reporting your default is significantly higher than a mexican company. and the fact that you still have a loan balance means at the very least whoever the creditor was that loaned you the money is going to make some effort to recover those funds. the level of effort like mentioned above...all depends and can change from one situation to another.

I think it would be safe to assume if you defaulted on your loan from DRI, that at the very least the default on the loan payment would certainly show up on your credit. (perhaps the default on the maint fee would have a different result, but it would certainly be less of an impact than defaulting on a multi thousand dollar loan)

 

[T_R_Oglodyte]

Reviving an older thread... have the same question as OP, but specifically for Diamond Resorts...

We bought Diamond Resorts timeshare at Cabo Azul, Mexico. The agreement is with DPM Acquisition Mexico, S. DE R.L. DE CV... "the legal entity in charge of selling and managing the timeshare program." There's another page for "The Club Membership" which is with Diamond Resorts International Club, Inc. a Florida Corporation (I believe this is the exchange).

Because we purchased all of this is Mexico, even though Diamond is US based... what's the repercussion of stopping our payments and just "walking away" (still have a balance on loan). Again, specifically for Diamond Resorts... All the responses here seem to conflict. Strangely, my husband does not see Diamond on his credit reports (all 3 agencies)...

Your are asking for advice on legal questions. Please bear in mind that free legal advice is worth exactly what you paid for it.

 

[kalles]

I purchased a Mexican timeshare on eBay and stopped paying maintenance fees they doubled. Timeshare was worthless couldn’t sell it and didn’t use it. They stopped sending me bills then 4 years later a got a collection agency from us request double of what I owe for interest and late fees. I don’t know what to do my credit is perfect other than this nightmare. The timeshare in Mexico won’t even discuss it with me they said you have to pay whether we bill you or not can I do anything

 

[easyrider]

Reviving an older thread... have the same question as OP, but specifically for Diamond Resorts...

We bought Diamond Resorts timeshare at Cabo Azul, Mexico. The agreement is with DPM Acquisition Mexico, S. DE R.L. DE CV... "the legal entity in charge of selling and managing the timeshare program." There's another page for "The Club Membership" which is with Diamond Resorts International Club, Inc. a Florida Corporation (I believe this is the exchange).

Because we purchased all of this is Mexico, even though Diamond is US based... what's the repercussion of stopping our payments and just "walking away" (still have a balance on loan). Again, specifically for Diamond Resorts... All the responses here seem to conflict. Strangely, my husband does not see Diamond on his credit reports (all 3 agencies)...

If the financing is through an American Bank, like a line of credit, then it is likely to affect your credit report and score if they go to court to get a judgement against you for the debt. Because you bought a "Club Membership" there is nothing to foreclose. A deeded timeshare is a mortgaged backed security. A Club Membership isn't.

They will likely write off the debt and eventually sell it to debt collectors for pennies on the dollar.

Bill

 

[easyrider]

I was thinking about timeshare debt today. Personally, I have always paid every bill I made. I did cancel a timeshare contract within the rescission period, thanks to Tug. I ended up buying 17 weeks after learning how to, thanks to Tug. I learned how to rent and sell these timeshares, thanks to Tug. I now have a decent portfolio of weeks I like that are mostly rtu's that begin expiring in a couple of years, meaning I learned a timeshare exit strategy, thanks to Tug.

Regarding timeshares, many people feel it is ok to just stop paying their contracts or maintenance fee's. I don't share that feeling for most cases. Especially when some one buys a resale and decides to just stop paying the mf because they are too ignorant or lazy to give it away or sell it. Regarding defaults, just because you can, doesn't really mean you should, in many cases, imo.

I understand that people over pay for timeshares. I personally know many people that will only buy a timeshare from a developer. They absolutely can afford it and get much pleasure from their purchase.

I personally know people that can not really afford a timeshare but they make the best of it meaning they didn't default. They sucked it up and learned how to enjoy it. This includes me with my first WM purchase.

I get that there are many reasons why people can no longer afford their timeshares and that the developers have made it tough to get out of a contract. Bankruptcy or death seem to be the sure ways out of a timeshare contract.

Really, the bottom line for me on the subject of defaulting is the person should try to give the timeshare away or try to make a deal with the developer before defaulting.

Bill

 

[pittle]

In 2008, hubs fell in love with 2 "boutique resort" properties that he just had to have. One was in Mazatlan and the other in Puerto Vallarta. Both were pre-construction purchases and have gone belly up because they have never been finished, so we have walked away lost our money. We did go to each of these resorts in their semi-finished state quite a few times, so those were some expensive weeks!

Two years ago, the nicer one (PV) raised the MF to a level that was $300 higher than our Sky Suite unit and we chose not to send them the money or make a reservation for 2017. They had only 2 two-bedroom units completed and 4 Studios. They have no amenities whatsoever. In 2018, I got an email asking if we were still a part of their "family" and I said that we could no longer afford it. They said they understood. We have heard that this place is trying to sell all the units as full-ownership condos and is happy when more and more owners of the 2-bedroom units are dropping out.

The Mazatlan one has an awesome location. We had the month of June in a beachfront 2-bedroom fixed time unit. We knew that the low fixed MF would not sustain it, but the fixed MF was only for those who bought pre-construction. They built the first 8 units and started a snazzier tower and focused on that. The deferred maintenance on the first 8 has taken its toll. In 2014, they changed the name and offered us a Senior Certificate that would allow us to go our entire month with no MF for the rest of our lives for a prepayment of 3 years MF. We drove down in 2015 and stayed 2 of our 4 weeks, and went in 2017 and stayed 6 days - A/C did not work and furniture looked awful - I covered it with a sheet. In 2018, hubs flew down intending to stay 2 weeks as he loves the location - he arrived on Saturday and called me Monday morning telling me to change his ticket and get him home ASAP! Now they have sold the resort and the new owners have cancelled our fixed time reservations and quadrupled the MF. We were told that the new owners were not going to honor the Sr. Certs and we would have to come there to renegotiate our contract. Since they are not honoring our written contract, we are considering it null & void. We will not send them any money.

We have not seen either of these on our credit report.

 

[LannyPC]

Really, the bottom line for me on the subject of defaulting is the person should try to give the timeshare away or try to make a deal with the developer before defaulting.

While I won't dispute that point, I think one problem "owners" of Mexican TSs have if they want to give their TS away is the high transfer costs that the resorts impose. With that in mind, "owners" who want to get rid of what they have thus feel it's cheaper to default and not pay any transfer costs than to give it away and pay the transfer costs.

 

[easyrider]

While I won't dispute that point, I think one problem "owners" of Mexican TSs have if they want to give their TS away is the high transfer costs that the resorts impose. With that in mind, "owners" who want to get rid of what they have thus feel it's cheaper to default and not pay any transfer costs than to give it away and pay the transfer costs.

I think you and Phyllis have made valid points regarding Mexican timeshare developers changing their rules and costs. While the transfer fee has increased at the Villa Group, the Mexican timeshare I own multiple contracts with, the mf really hasn't increased too much.

Some Mexican resorts have huge transfer fee's and extra mf's every so many years and they are very hard to get rid of. I guess walking away is sometimes the best action to take.

Regarding the Villa Group, there are different types of ownership. The newest type are points. The points revert to a premiere membership when sold with the mf of the points. I can see people walking away from these as no one would buy it resale.

If the memberships I bought resale were to significantly change and I didn't want it anymore I would first call the developer to tell them. I would also attempt to give the membership away. Then I would likely stop paying the mf and disregard all attempts made to collect by the resort unless they were able to get a judgement in the USA which is very unlikely to happen.

Bill

 

[TravelTime]

I hope it is. It is not fair for people to default and the rest of us need to pay for them.

 

[Passepartout]

I hope it is. It is not fair for people to default and the rest of us need to pay for them.

Unlikely. If people default on MF in Mexico, it can't be reported to U.S. credit reporting agencies. Possibly a different story if the Mexican resort is based in the U.S. But I suspect few are.

Of course the premise of the thread is 'Defaulting on a Mexican Timeshare PURCHASE', not a default of ongoing MF.

Defaulting on the purchase would have no effect on other 'owners'.

 

[PigsDad]

Of course the premise of the thread is 'Defaulting on a Mexican Timeshare PURCHASE', not a default of ongoing MF.

Defaulting on the purchase would have no effect on other 'owners'.

How can one default on a purchase, but not the ongoing maintenance fees???

Kurt

 

[Passepartout]

How can one default on a purchase, but not the ongoing maintenance fees???

Kurt

By stopping payments for the purchase. Of course it would also be stopping MF payments too, but that isn't what the thread header says.

 

[pittle]

I agree with the giveaway/selling option. We have bought and sold quite a few timeshares resale since 1991. The two that I mentioned above were special circumstances and we could not give them away if anyone read the reviews here or on Trip Advisor - they are both lost causes.

We do have one that we are considering giving to a son and his wife as they seem to like going with us to our timeshares. They may not when they have to pay for it. It has 10 years left on the contract. I bought it resale for basically the cost of the then transfer - $400. They are going to this resort the first week of May and if they want it, we will pay the transfer fees and put their names on it. I will then teach then how to use SFX to go wherever they want to go. If they do not want it, it will be posted on TUG in the bargain section sometime this summer. We bought this 1 bedroom 2 bath unit for overflow to the beachfront unit because a really nice resort is next door - we send our guests there or use it for SFX exchanges. Our SFX expires at the end of this year and we just plan to go to our Mayan World and Buganvilias in the future.