How New Debt Collection Laws in 2021 Affect Timeshare Owners

New debt collection laws 2021: woman holding a piggy bank while being served a final notice

If you’re at the point where the only way to escape your timeshare is to default on payments and go into foreclosure, we feel for you. The process of ending a timeshare contract is not an easy one, and though halting payments will affect your credit score, it may be the only option for owners with constrictive timeshare companies. 


But before you stop your payments altogether, it’s important to know your rights as a consumer. According to new debt collection laws in 2021, policies have been put in place to protect the privacy of timeshare owners who’ve gone into debt by defaulting on their payments. However helpful these policies may be, defaulting on payments may not be the best or only option for escaping timeshare ownership. In this article, we provide you with information about why people choose the default route for exiting a timeshare and why you should be wary of taking this action.


What Happens When You Default on Timeshare Payments

If you’ve been trying to escape timeshare ownership, you may be aware of how complicated this process is. Timeshare developers do not want to make it easy for you to end your contract. But sometimes maintenance fees and additional credit card payments from your developer get so high that owners just don’t have the funds to keep up. 


Accumulating consumer debt obviously isn’t an ideal situation. As the amount of the debt you have piles on, timeshare companies will hound you with telephone calls, voicemails, emails, letters, and even text messages inquiring about your missing payments. Soon you will lose access to your timeshare weeks and won’t be able to check in at your resort. You won’t be allowed to rent out your timeshare or even enter your unit. And if you try to cash in your exchange your weeks, you will also be denied.


If you ignore your timeshare developer after they’ve reached out to you multiple times, this original creditor will pass on your timeshare account number and contact information to a collection agency who will then start mercilessly contacting you for payment. Initially, they will send you a validation notice that states how much you owe to your resort. This establishes that they’ve made initial communication with you and made it clear the amount you haven’t paid to your developer. But keep in mind that both your timeshare company and the collection agency keep track of how many times they’ve contacted you. As time goes on and your debt accumulates, the phone calls and electronic communication you’ve ignored likely lead to late fees added onto the amount you already owe. 


The situation worsens if you used a third-party loan to finance your timeshare. If you cannot keep up with the payments on your loan and you’re also behind on maintenance fees, you’ll be contacted by debt collectors on multiple fronts. At this point, you might as well avoid any credit reporting websites because your score will most certainly have gone down significantly.


How New Debt Collection Laws in 2021 Protect Timeshare Owners

For timeshare owners who’ve already started defaulting on their loans, there is some slightly good news. According to the Fair Debt Collection Practices Act (FDCPA), new debt collection laws in 2021 have been put in place to protect consumers from being harassed by debt collectors. They are meant to be a safe harbor for consumers struggling with debt. These laws prevent unethical and bothersome practices from being employed by debt collectors. Here are some of the amendments in the new debt collection laws in 2021 that have been made in favor of consumer rights for timeshare owners and the general public of debtors.


Reducing Phone Calls

Entrepreneur talking on the phone

Of course, debt collectors have to make regulatory calls to consumers who are in debt. But the frequency at which they can do it is being limited by the new debt collection laws in 2021. Now debt collectors are not allowed to contact consumers more than seven times within a period of seven days. The only exceptions to this rule are if they are contacting you about two separate debts that you possess, if you gave them permission to contact you, if they are contacting you on an alternate phone number, or if they are contacting your timeshare attorney or another professional connected to the matter. 


Additionally, debt collectors are not allowed to reach out to you at inconvenient times and are only allowed to leave limited-content messages on voicemail that simply state the collection agency‘s name and contact information. And if you request for them to stop calling you on a specific number, they must abide.


Social Media Regulations

If a debt collector contacts you through your social media accounts, one of the new debt collection rules requires the collector to request contact with you first. They are not able to send you a private message until you accept them as a friend or follower on the social media platform with the knowledge that they are indeed a debt collector. If the consumer prefers to not be contacted through electronic communication, the debt collector has to provide a convenient way for them to opt out.


Limitations on Electronic Communication

New email notification on a tablet

While the new debt collection laws in 2021 allow debt collectors to contact you through email, there are limitations in place meant to protect consumers. For example, collectors are not allowed to contact you on your work email unless you give approval first or if you’ve used this address to contact them before. This prevents personal information, such as the name of the creditor you owe money to or the amount you owe, from being exposed in a public work setting. 


Why You Should Avoid Defaulting

Even though the new debt collection laws in 2021 have been put in place to help consumers in debt, they shouldn’t encourage you to continue defaulting on timeshare payments. Consumer advocates state that these protections are not enough to prevent debtors from the harm and stress that can occur in these tricky situations. But if you aren’t already convinced that defaulting on your timeshare payments can be damaging, here are other reasons why you should avoid it. 


Your timeshare developer has an incentive for pursuing payment from you. Of course, they don’t want to lose you as a customer, but they also don’t want to anger other timeshare owners who are deeded to the same timeshare unit as you. Because if you are unable to pay your dues, that means they’ll have to raise maintenance fees for the other customers. Because of this, developers may take legal action against you and pursue timeshare foreclosure.


Timeshare companies have the right to take you to court for contract violations, like neglecting to pay your dues. They can get judgment for the amount you owe on your timeshare property and may even force you to sell assets like your home to satisfy said judgment. This is a common practice for clients who owe upward of $75,000. If this is your reality, having legal representation and a record of contesting the validity of a contract can stop this from occurring.


Escape Your Contract Without Defaulting

New debt collection laws 2021: 2 professionals shaking hands

Going into debt is not fun. Neither is having to dodge phone calls, emails, texts, and social media messages from your timeshare company and other debt collectors. Even though the new debt collection laws in 2021 provide better protection for consumers in debt, the collection industry will bring your life, your timeshare experience, and your credit score down. So don’t default on payments and instead seek some legal help of your own with Centerstone Group.


Centerstone Group is a full-service advocacy group that knows how to help clients stuck in tricky timeshare contracts with expensive fees they cannot afford. Our team of timeshare relief experts knows the ins and outs of timeshare policies and may be able to help you seek release from your contract and relief from the mounds of debt you’re currently stuck with. If you’ve been a victim of fraud, high-pressure sales tactics, or misrepresentation during the timeshare sales process, contact Centerstone Group for a free consultation.


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