The average cost to get out of a timeshare contract can vary depending on the timeshare exit company or attorney you use. However, most companies and attorneys will charge a flat fee for their services.
Some exit companies also lure people with a money-back guarantee; this is false. Guaranteeing the Cancelation of a Debt is prohibited by the Federal Trade Commission. No person, exit company, nor an attorney can make such a guarantee.
This article will help you determine the pros and cons of using services offered by exit companies and law firms to help you determine what is your best option to mitigate your risk on both results and expense.
What is the Average Cost to Get Out of a Timeshare Using Timeshare Exit Companies?
The average cost to get out of a timeshare using a timeshare exit company can vary depending on the specific company you use and the services they provide.
Generally speaking; however, you can expect to pay between $6,000 to $8,000 to have an exit company try to cancel your contract. This fee will cover the cost of the commission paid to the salesperson for the exit company, which is 20% of your fee paid, covering administrative fees for the timeshare cancellation letter sent to the timeshare's management company, and the company's profit.
It is important to note that you may also be responsible for any outstanding maintenance fees or other debts owed to the timeshare company. Additional early termination penalties assessed by the management company could add several hundred if not thousands of dollars to the total cost of exiting your timeshare.
Why We Do Not Recommend A Timeshare Exit Company
As the popularity of dissatisfied timeshare ownership has grown, so too have the number of exit companies offering to help owners cancel their contracts. While there are many companies claiming to have a 98% to 100% success rate and offer a money-back guarantee, many timeshare developers sued timeshare exit companies for tortious interference leaving timeshare owners with their timeshare contracts active and losing thousands of dollars.
One of the most well-known companies, Timeshare Exit Team, which at one point was endorsed by Dave Ramsey, was shut down after charging customers large upfront fees and making false guarantees to cancel their timeshare contracts.
Reed Hein & Associates, also known as the Timeshare Exit Team, was ordered to immediately cease its deceptive timeshare exit tactics and pay Washington State $2.61 million. Plus, an additional $19 million if it fails to follow the conditions of a consent decree – and has effectively closed its doors as of February 2022, serving as yet another example of a fraudulent exit company.
According to the Better Business Bureau, as well as consumer testimonies and news reports, another firm, Timeshare Termination Team, shut its doors suddenly in July 2021 without notice. Its website appears down, and the firm has not responded to customer inquiries regarding the thousands of dollars in upfront payments it took but did not deliver any service.
In 2019, American Consumer Credit was fined $23 million in civil penalties and permanently prohibited from pursuing exit activities. That same year, American Resource Management Group sought bankruptcy with $20 million worth of outstanding consumer creditor claims, having been sued multiple times for deceptive marketing and sales.
According to bankruptcy filings, the group previously went by the names Resort Release Company and Amigo Beach Realty. The company's connection to a slew of other firms that have filed for bankruptcy, including Redemption and Release, Resort Exit Team, Resort Release, and Vacation Properties For Less.
The American Resort Development Association remains adamant in warning consumers about these third-party timeshare exit companies.
Timeshare companies will not communicate with exit companies as they are not legal counsel.
False Money Back Guarantee
Many of these companies have complaints with the better business bureau for not refunding their upfront fee due to failure to render services.
A timeshare developer, Diamond Resorts International, has sued Wesley Financial Group for Allegedly Driving People into Financial Problems and Foreclosure. The plaintiffs from Diamond Resorts charged that Wesley Financial Group made untrue statements about relieving timeshare owners of responsibilities and discouraged prospective consumers from hiring a lawyer.
The lawsuit stated that Wesley strives to prevent conversations between timeshare developers and customers, communicates with the owner of the timeshare to stop making payments on legitimate debts or else the process will stretch out; and urges the timeshare owner not to make further payments on outstanding obligations to their timeshare company.
If customers fail to comply with the terms of the contract with Wesley Financial Group, customers will breach the money-back guarantee and will not get their money back if the contract does not cancel.
We recommend timeshare lawyers who practice consumer protection and timeshare law for the reasons mentioned above.
What is the Average Cost to Get Out of a Timeshare Using a Timeshare Transfer Company?
The average cost to get out of a timeshare using a timeshare transfer company is typically around $3,000. The average cost doesn't include title transfer fees ranging between $300 to $500 depending on the state of your timeshare's location.
You will add another $500 to $1,500 for the resort's transfer of membership fee and $1,500 in legal fees for a law firm to produce a purchase agreement between you and the new owner.
Many timeshare members are unaware that the timeshare developers' management company is legally allowed to refuse the transfer of your membership rights. Contractually they have the Right of First Refusal as the developer owns the property, and you are transferring your right to use their timeshare.
You are taking the risk of paying a transfer company three thousand dollars and getting denied by the resort's management company.
It would be best to pay the company once the management company has approved the transfer and completed the transfer out of your name.
What is the Average Cost to Get Out of a Timeshare Using Timeshare Lawyers?
If you're a timeshare member who wants to cancel their contract, you may be wondering how much do Timeshare Lawyers Cost? The average cost to get out of a timeshare using a timeshare attorney can vary depending on the experience and success rate of the attorney you employ.
Generally speaking; however, you can expect to pay between $4,000 to $6,000 to have lawyers for timeshare exit to cancel your contract. The flat fee is for a timeshare loan paid in full. Having a loan balance may add an extra expense.
The attorney's fee is separate from any early termination fees, maintenance fees pending, or costs associated with cancelling your timeshare.
Many timeshare owners would like to cancel their loan balance. Timeshare attorneys predicate their fees based on the loan balance of the timeshare mortgage they are canceling. Many attorneys charge between 10% to 15% of the loan they eliminate.
When choosing a timeshare cancellation attorney, it's essential to do your research and pick someone who has experience dealing with your timeshare company and their timeshare contracts. You should also make sure that the attorney you choose has a high success rate in cancelling timeshare purchase agreements.
If you're not sure where to start, you can ask for recommendations from friends or family who have successfully cancelled their own timeshare contracts. You can also search for timeshare cancellations attorneys or a timeshare exit law firm online.
When you've found a few potential timeshare attorneys, be sure to read reviews from other clients to get an idea of their experience and success rate.
Once you've chosen an attorney, they will work with you to cancel your timeshare contract. The process and timeline can vary depending on the attorney and your individual situation, but you can expect the entire process to take between 12 to 24 months.
If you're considering cancelling your timeshare contract, be sure to speak with a timeshare cancellation attorney or law firm to learn more about the process and what you can expect.
With their help, you can successfully cancel your timeshare contract and be free from your timeshare obligations.
Why We Recommend Using Timeshare Attorneys
If you're considering getting out of your timeshare contract, you may be wondering whether to hire a timeshare attorney or use an exit company. While exit companies often claim to be able to get you out of your contract quickly and easily, we recommend using a timeshare attorney for a number of reasons.
First and foremost, fiduciary duties bound timeshare attorneys to the public, which means they must always act in your best interests. On the other hand, Exit companies are not subject to such duties and may not have your best interests at heart.
Second, timeshare attorneys have a thorough understanding of timeshare law and know how to navigate the often-complex legal process involved in getting out of a timeshare agreement. On the other hand, Exit companies do not practice law and may not be able to get you the results you're hoping for.
Third, timeshare attorneys typically offer a free consultation, so you can get an idea of whether they're the right fit for you without having to commit to anything. On the other hand, Exit companies often charge upfront fees, which you may not get back even if they are unable to help you get out of your contract.
For all these reasons, we recommend using a timeshare attorney rather than an exit company if you're looking to get out of your timeshare agreement.
What is the Penalty for Cancelling a Timeshare?
The answer to this question depends on the specific contract and company involved. Some timeshare companies may charge a $500 fee for administration costs, while others may charge 10% of the loan balance.
Additionally, many timeshare purchase agreements include clauses that require the individual to pay 3 to 5 years' worth of annual maintenance fees if they cancel the contract early.
It is important to read over the release of your timeshare agreement before signing to fully understand the terms and conditions proposed by the timeshare developer.
What Documents Will I Receive When My Contract Is Cancelled?
You can expect to receive one of the following documents when your timeshare developer cancels your timeshare agreement:
Deed in Lieu of Foreclosure
Relinquishment of Membership Rights agreement without any Financial Reimbursement to the timeshare owner
Settlement Agreement and Mutual Release
A settlement agreement and mutual release is a legal document in which both parties agree to resolve the issue and forego all future claims, even unknown claims, from either party at the time of signing.
Early Termination Fees and Recording Fees may apply for any paperwork you have Recorded with the County Clerk Court of the timeshare's county. To have all of this done Legally, Ethically, and Properly Documented, you will need to hire a Timeshare Attorney that understands Consumer Protection and Timeshare Law, NOT a Timeshare Exit Company.
Can you just walk away from a timeshare?
The short answer is No. Unfortunately, it's not that simple. If you're ready to walk away from a timeshare, you'll likely have to pay a hefty fee.
When you sign a timeshare agreement, you typically agree to make payments for a set period of time - often 20 years or more.
If you stop making payments, the timeshare company can take legal action against you. You may also face negative consequences on your credit report in some cases.
What happens if you just stop paying your timeshare?
If you stop paying your timeshare loan, the developer may sue you and get a judgment to put a lien on your tangible property. Loans paid off are not an exception. Many developers may go after maintenance fees they would have otherwise collected for a period of time.
The default of payment could ruin your credit score and make it difficult to purchase tangible property in the future.
How hard is it to cancel a timeshare?
It's actually quite difficult to cancel a timeshare purchase agreement. It's challenging because most timeshare purchase agreements are lifetime obligations, meaning that you are responsible for paying the maintenance fees for as long as the contract is in effect.
A lifetime contract can be a real financial burden, mainly if you no longer use or enjoy your timeshare.
Some contracts have a specific number of years. Suppose you signed a 40-year contract to use a timeshare. If you have used it for 13 out of the 40 years, you would have 27 years left. The requirement to cancel will be to pay the remainder of the maintenance fees due under the contract, in this case, 27 years.
If you're considering cancelling your timeshare, it's essential to understand all of your options and the potential consequences before making a decision without using a timeshare lawyer.
Cost of Timeshare Vs. Cost of Timeshare Cancellation Process
The cost of a timeshare can vary depending on the annual maintenance fee, with an average increase of 4% to 6% a year in many cases 7% to 12%. Generally, annual fees for a timeshare average $1,035 but can go upwards of $6,000 for the term of the contract.
In 20 years, you and your family may pay for a timeshare not being used all the time. You are looking at $30,000 to $40,000 in the next 20 years. In addition, many timeshare resorts charge special assessments that can be hundreds or even thousands of dollars for renovations, financial deficits, and unpaid balances by other members.
Suppose you hire an attorney to cancel your financial obligations under the contract. If the average cost is $4,000 to $6,000, you are taking the next 4 to 5 years of maintenances fees to get out of a timeshare.
Your cost-benefit analysis would indicate hiring a timeshare lawyer would be less expensive to keep your unwanted timeshare.
Conclusion
Finally, whether you keep your timeshare or not depends on how often you plan to use it. If you only use your timeshare once every three years, why pay three years' worth of annual dues for one week of vacation?
If you would like a free timeshare exit consultation, you can contact our office for more information to determine your options.
Please do not hesitate to call us today at 866-519-7368.