In this article, we’ll break down the truth about the timeshare exit industry. We’ll cover everything from how legitimate timeshare cancellation companies operate, what to watch out for, and how to tell the difference between a legitimate timeshare exit company and a sketchy one.
If you’re considering using a timeshare exit company or just want to understand your options, this guide is for you.
Many consumers claim to have been lied to, pressured, or otherwise wronged during the purchase of their timeshare. This fact, coupled with the often lifetime commitment that a timeshare contract entails, leads some consumers to seek out timeshare relief companies to help deal with the matter.
Exiting a timeshare on your own can be overwhelming, but also downright dangerous to your financial wellbeing. Some timeshare owners who tried to cancel a timeshare by stopping their payments have reported being harassed and often sued in court.
One couple were arrested in Mexico for defaulting on their timeshare. While this is a rare, extreme circumstance, it illustrates why you need an attorney to help you navigate timeshare cancellation.
The Dirty Little Secret About (most) Timeshare Exit Companies
The dirty little secret about timeshare cancellation is that almost all of the exit firms will try to steer you into what is called “strategic default.”
Strategic default is defined by Investopedia as: “a deliberate decision by a borrower to stop making payments on a debt.”
Now, there are cases (outside of timeshare cancellation) where strategic default is a legitimate and viable strategy. Debt settlement firms use strategic default to help consumers settle out large amounts of debt. This is done under the direct and personal supervision of an attorney.
However, in the timeshare cancellation world, most companies are claiming to offer a “legal cancellation” of your timeshare. Strategic default is NOT a legal strategy. These companies are treating timeshare cancellation as if it were debt settlement. This is wildly dangerous.
Minnesota Attorney General recently opined about this exact situation, forcing a timeshare exit company to rescind ALL contracts in Minnesota and pay a very large fine. This is because (allegedly), the company was approaching timeshare cancellation as one would approach debt settlement, but was not licensed as a debt settlement provider.
The company that was sanction by the MN Attorney General was the back-end service provider for a large portion of timeshare exit companies. We estimate that over 50 timeshare exit firms outsource their clients to that company.
The Timeshare Exit Company Service Model
The vast majority of timeshare exit companies do not offer a service that you cannot do on your own. I’ll explain the details of this later, but basically, their entire client servicing model goes like this:
- Sell you the service.
- Onboard you, get your resort contract, etc.
- Direct you to stop paying for your timeshare, or, tell you that “the exit process will be easier if you stop paying. – This is the biggest lie in the industry at this time.
- Send you meaningless updates, tell you that your “case is proceeding” or “we believe the resort is going to let you out soon.”
- Over the next 1-3 years your credit is ruined, you have a foreclosure, and you suffer all the negative impacts, including possible lawsuits.
- Eventually, you are released from your timeshare because you just stopped paying.
You see, in this type of timeshare cancellation model, all you’ve really paid for is someone to receive your mail and pretend to provide a legitimate service. You could have done this yourself without the whole charade of pretend legal services.
Outsourcing Your Case to 3rd Parties
More than 50% of timeshare exit companies do not actually provide the service that they sell. Say what!?
We knew this was an unsustainable business model which is why we collaborated with Attorney Dennis Donovan to form Stonegate Law Firm.
A 3rd party “closing service” or “legal service provider” cannot provide a large amount of value to consumers. It’s simply not possible.
This is why we’re so adamant about blowing the whistle on these types of practices. They are BAD for consumers and BAD for our industry.
So if you’ve signed with a company like “Jim-Bob’s Legal Timeshare Exit Company” and you get a call from a 3rd party who says they are “_______ Closing Company on behalf of Jim-Bob’s Legal Timeshare Exit Company” then you’ve been outsourced.
But again, if you signed up with ol’ Jim-Bob AND Jim-Bob told you they would outsource your case, then they were honest and there’s not really an issue, because YOU understood what you were purchasing.

How much do exit companies pay for 3rd party client servicing?
Last we checked, many years ago, the price was $750 per client if the client had one timeshare contract and then $1200 if the client had 2+ timeshare contracts.
How much VALUE can a company provide over 12-24 months for only $750? It’s absurd to think you would receive a high level of service if you fall into this type of arrangement.
Questions to Ask Before You Hire a Timeshare Cancellation Firm:
- What if my resort refuses to communicate with you? How do you handle that?
- Are you going to require that I default (stop paying) for my timeshare?
- How, specifically, do you handle negative credit reporting? Why would the resort be inclined to remove those negative marks?
- Do you have any clients who also own with [your resort], and what was the outcome for those clients?
- What is the name of the company that will be handling my actual exit? Are you contracted with a 3rd party service provider?
How a Legitimate Timeshare Exit Company Operates
At Stonegate, we’re in a unique position, dealing with thousands of timeshare owners every single month. This has allowed us to amass a mountain of data, that we can then use to inform our client servicing model.
First, let’s clarify one thing: If the timeshare exit company is honest with you about their processes, that’s a major step in the right direction. If the company tells you that the only strategy they have at their disposal is strategic default, then it’s up to you to decide is you are OK with that.
Honesty is important and we recognize that other companies do not have the same resources as Stonegate at their disposal.
A legitimate timeshare cancellation service will include the following:
- Legal representation from a licensed attorney (it’s ok if this representation is as-needed or limited in scope to the timeshare matter)
- The ability to legally challenge your contract under Federal consumer protection laws.
- The ability to collaborate with local counsel (attorneys from your area) should the need arise (non-attorneys cannot do this).
- The ability to apply credible legal pressure if needed.
Steps For Enrollment With a Legitimate Exit Company
- Initial Consultation
The first step in the timeshare exit process is the initial consultation.
During this phase, the exit company gathers detailed information about the client’s timeshare ownership, including the contract’s terms, the timeshare location, and any outstanding financial obligations. This consultation helps the company assess whether the client is a suitable candidate for exit and determine the best course of action.
- Legal Analysis
Once the initial consultation is complete, the company conducts a thorough legal review of the timeshare contract.
Experienced legal professionals will scrutinize the agreement for any inconsistencies, unclear terms, or violations that could serve as a basis for termination.
They may look for loopholes, such as the misrepresentation of facts, the developer’s failure to fulfill contractual obligations, or legal rights that allow for contract rescission.
- Negotiation
After completing the legal analysis, the next step is often direct negotiation with the timeshare resort or developer.
The goal is to achieve a mutually agreeable exit agreement that frees the timeshare owner from their contractual obligations.
Negotiations may focus on finding a settlement, offering a one-time payment, or agreeing to relinquish ownership in exchange for the cancellation of future payments. Exit companies use their expertise and leverage to negotiate the best possible terms for their clients.
- Legal Action
If negotiations fail, legal action may be the final recourse. This can involve filing a lawsuit against the timeshare developer or resort.
Timeshare exit companies that have in-house legal teams or partnerships with experienced attorneys are better equipped to take legal action when necessary. Legal action can be a costly and time-consuming process, but for some owners, it may be the only viable option for exiting their contract.
Costs and Fees
- Upfront Fees
Many timeshare exit companies charge upfront fees for their services, which can range from a few thousand dollars to over $10,000, depending on the complexity of the case.
These fees typically cover the initial consultation, legal analysis, and the effort required to negotiate with the timeshare resort.
Be cautious of companies that demand large fees upfront without providing a clear strategy or timeline for your exit.
- Success Fees
Some companies only receive payment if they successfully assist you in terminating your timeshare contract.
Success fees align the company’s incentives with the client’s goal, but the total cost may be higher than upfront payment models. Make sure to clarify whether success fees apply and what happens if the exit is unsuccessful.
- Hidden Costs
While most timeshare exit companies aim to be transparent, there can be hidden costs, such as additional fees for legal representation or extra charges for unexpected developments in the case.
It’s important to ask for a full breakdown of potential costs before committing to a timeshare exit company.
Choosing a Reputable Timeshare Exit Company
- Research and Verification
Given the financial investment involved, it’s critical to thoroughly research any timeshare exit company before signing a contract.
Verify their credentials, check with the Better Business Bureau (BBB), and read reviews from previous clients.
Some companies have been known to take advantage of vulnerable timeshare owners, so careful research is essential.
- Credentials and Experience
Look for companies that have a proven track record in timeshare exits, particularly those with in-house attorneys or partnerships with experienced legal professionals.
The more experience the company has, the better equipped they will be to navigate the complexities of timeshare law.
- Client Testimonials
Reading client testimonials can provide valuable insight into the company’s effectiveness. Look for reviews that highlight successful exits, professional conduct, and transparent communication.
Positive testimonials are a strong indicator of a reputable and trustworthy company.
The Stonegate Firm Difference
- 20+ Years’ Experience
Stonegate Firm stands out with over 20 years of experience in the timeshare industry. This extensive background enables the company to tackle even the most complex cases with confidence and efficiency.
- Pay Only Once
Unlike many other companies that charge additional fees throughout the exit process, Stonegate Firm has a “pay only once” policy. Clients pay a single fee for the firm’s services, ensuring transparency and peace of mind.
- E-Z Payment Plans
For clients who may not be able to afford the full fee upfront, Stonegate Firm offers flexible payment plans. This makes the exit process more accessible to a wider range of timeshare owners.
- Co-Branded Law Firm
Stonegate Firm is proud to have Dennis Donovan, Esq., as its dedicated timeshare exit attorney. Dennis brings extensive legal expertise to the table, ensuring that clients receive the highest level of representation and legal advice.
- Expertise and Experience
With decades of experience and a focus on ethical and transparent practices, Stonegate Firm is a leader in the timeshare exit industry. Dennis Donovan’s expertise in contract law, combined with the firm’s commitment to client success, ensure a results-driven approach.
- Ethical and Transparent Services
Stonegate Firm takes pride in providing ethical and transparent services to its clients. The firm’s straightforward pricing model and open communication ensure that clients know what to expect every step of the way.
Speak to a Timeshare Exit Expert
Exiting a timeshare contract can be a complex and overwhelming process, but with the right timeshare exit company, it becomes manageable.
Stonegate Firm offers a trusted, results-driven approach that simplifies the exit process for timeshare owners.
Contact Stonegate Firm today at 866-568-0071 for a FREE consultation and take the first step toward freeing yourself from your timeshare obligations.