Scotland

Timeshare: A question of debt

I'm Fergus Muirhead and I'm here to answer any questions you may have about any money or consumer issues.

Please drop me a line at fergus@bbc.co.uk with your questions. You can also read more on money and consumer issues on my own blog.

Q. I bought a timeshare week with my ex-wife about 12 years ago. Since we got divorced neither of us can afford the maintenance fees. I've told them this. I phoned again to explain the predicament and also point out that I have absolutely NO assets or savings. I am indeed paying off some business debts amassed over the years. I spoke to someone from the company who suggested that I could get out of the deal if I paid £6,000. I asked for a copy of the agreement and he said it would cost £50. Today I spoke to someone from a collection agency that has been appointed by the timeshare company. They are going to send out forms for us to fill in explaining our financial situation. The amount owed is £1,761. Can you suggest what I should do? David Gordon, Edinburgh

A. I'm going to concentrate on this question on its own today, and use David's issues with the timeshare company as a springboard for some other helpful tips I want to give you because it raises some interesting points.

For me this is not about timeshare, or whether you should or should not have been involved in the agreement in the first place.

Having said that, there is no question that the arrangement became difficult for you to manage after your divorce, and for many of us a marriage split is often the catalyst for money problems to emerge since something that was affordable when two people are paying for it suddenly becomes a problem when it is left to one person to deal with.

It's also the case here that your current business situation, where you are using all the spare money you have to make a business venture work, does not allow you much flexibility.

The biggest issue, however, is that you didn't really do an awful lot to help the timeshare company solve the problem with you. I spoke with them and they were very helpful, but their main criticism was that they had been writing to you for at least a year and you hadn't answered any of their letters.

And this is where the rest of my answer really applies to anyone, in any situation, where they are going to get into arrears with loans, timeshare agreements, mortgages - anything really!

The company that you owe money to can only help you if the speak to them.

Ideally you should contact any company that you have dealings with before you get behind with payments. It's an awful lot easier for them to help you, or to come up with a programme to make good any missed payments, if they know that you are likely to miss payments, rather than six months after the payments have been missed.

There are lots of reasons for people to fall into arrears with payments, the vast majority of them valid and no fault of those involved. Illness, losing a job or a marriage of relationship difficulty would be the ones that immediately spring to mind.

Companies that lend money are used to hearing about these problems, and are generally sympathetic and keen to help on the basis that it is an awful lot easier, and cheaper, for them to get back the money that you are probably legally obliged to pay them if they don't have to involve debt collectors or solicitors.

Where they get upset is when you don't make payments on time and you ignore the letters that they send you asking when you are going to make payment. That takes time and often money.

It's completely understandable, though. None of us likes to owe money, and we don't like to be reminded that we owe it, or that we are in arrears with arrangements we have made. So the natural reaction is to leave envelopes unopened, stick our heads in the sand and ignore it all in the hope that the company will forget about us and go away.

They rarely do.

David says in his letter to me that he called the company and explained his predicament.

Unfortunately he then chose to ignore all of the letters they subsequently sent him. So they had no idea whether David was ignoring them because he didn't want to pay them any money, perhaps because he didn't want the timeshare anymore and was trying to get out of the agreement, or because he had no money to pay them.

They only involved debt collectors and solicitors because they needed answers to that question.

When I spoke to them they were very understanding, telling me that they knew that they couldn't get blood out of a stone and that they would have to come to some agreement that worked for everyone. They also told me that they could probably have come to that agreement a long time ago if David had responded to their correspondence.

So if you have debts that you are struggling to pay because your circumstances have changed, call the company concerned and ask them what they can do to help. Can you have a payment holiday, can they suspend interest on your payments, what can they do to help?

You might have to help them by completing a statement of income and expenditure to confirm why you are unable to make payments but that's a small price to pay for the reduction in stress that comes with knowing you'll be able to open your mail in the morning and not have to worry where your next threatening letter is going to come from.

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