What happens if you stop paying your timeshare?

If you stop paying your timeshare, what happens depends on what you owe. A timeshare loan is secured by the timeshare interest, so a default can lead to foreclosure on that interest and, in some states, a deficiency judgment for any shortfall — though it does not touch your primary home. Unpaid maintenance fees and special assessments are unsecured, so the developer or its management company will send the account to collections, report the delinquency to the credit bureaus, and may sue for the balance. You cannot be jailed for a timeshare debt; it is civil. Once any loan is resolved and only maintenance-fee collections remain, that balance behaves like any other unsecured debt and may be negotiable — with the usual trade-offs of credit damage and possible tax on forgiven amounts. Exhaust the free exits first; deliberate default is a last resort, not a plan.

First, figure out which debt you have

"Stopping payment" has very different consequences depending on what you stopped paying, and most owners have one or both of these:

A timeshare loan — the financing you took out to buy the timeshare. This is secured by your timeshare interest, much like a mortgage is secured by a house.
Maintenance fees and special assessments — the recurring dues you owe every year whether or not you use the property. These are unsecured, like a credit-card balance.

The two tracks are handled very differently, so keep them separate in your head.

If you stop paying a timeshare loan

Because the loan is secured by the timeshare interest, a default follows the path of any secured-loan default:

Collection and late fees first. The lender contacts you and adds fees and interest.
Foreclosure on the timeshare interest. If the default continues, the developer or lender can foreclose — through a judicial or non-judicial process depending on the state. This affects only the timeshare interest, not your primary home.
A possible deficiency judgment. If the foreclosure sale brings less than what you owe, some states allow the lender to pursue you for the shortfall (a "deficiency"). Other states limit or bar deficiency judgments on timeshares. A local consumer attorney can tell you your state's rule.
Credit-report damage. The default and foreclosure are reported to the credit bureaus and can stay on your credit report for years.

Because the loan is secured, you do not "settle" it the way you would an unsecured balance — the lender's remedy is the collateral. The right move is to exhaust the legitimate exits first; see how to get out of a timeshare.

If you stop paying maintenance fees

Unpaid maintenance fees and special assessments are unsecured obligations, so the consequences look like an unpaid credit card:

The developer or management company pursues collection and adds late fees and interest.
The delinquency is reported to the credit bureaus, hurting your credit score.
The account may be sold or assigned to a collection agency, and the developer or collector may sue you for the balance.
In some states, a homeowners-association-style lien can attach to the timeshare interest for unpaid dues.

One thing that does not happen: you cannot be arrested or jailed for owing a timeshare debt. It is civil, not criminal — see can you go to jail for not paying debt. Threats of arrest from a collector violate the Fair Debt Collection Practices Act.

When only maintenance-fee collections are left

Once any loan is paid off, foreclosed, or otherwise resolved and the only thing remaining is unpaid maintenance fees in collections, that balance is unsecured — and the standard debt tools apply:

Negotiating with the collector. A collector that bought the account at a discount may accept less to close the file. This is not guaranteed — creditors are not required to accept any offer — and any forgiven amount over $600 can be reported to the IRS as taxable income on a 1099-C.
Nonprofit credit counseling. An NFCC-affiliated counselor (nfcc.org) can review your whole picture for free or low cost.
A settlement program, if you have several unsecured debts together. Weigh the trade-offs: a hit to your credit score and possible tax on forgiven balances, with no guarantee of a particular result.

If maintenance-fee collections are part of a broader unsecured-debt load, the decision tool below can help you see which route fits before you commit to any of them. This is general information, not legal or tax advice; for your situation, talk to a consumer attorney or a nonprofit counselor.