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Understand time-share risks and obligations before you sign

A timeshare is a unique type of real estate offering where people purchase shares of the property instead of the whole thing.

Unlike a property that's been left jointly to several people, timeshares are often owned by people that don't even know each other. The lure of the timeshare is that it allows people who could never afford a vacation home in a luxury spot to have that dream -- at least on a fixed schedule every year. Everyone who owns part of the property gets the use of it for their week or month, depending on how much they own.

Unfortunately, people often invest in timeshares when they're flush -- not realizing that the property can become an expensive albatross around their necks if their fortunes shift and they're unable to take those vacations once they're in the thick of their career or have young children in school.

If you stop paying for the timeshare's use or maintenance, management companies -- who often aggressively market their timeshares when they come on the market with indifference toward the buyer's needs -- step in and start collection proceedings.

If your timeshare is considered a "right-to-use" or a deeded property, the overdue balance on your use or maintenance fees can be sent to debt collection. Alternately, if the company thinks that you have any income or assets they can seize, they may take you to court to try to obtain a garnishment order.

If your timeshare is in a trust, you'll be subject to foreclosure action. You'll lose your portion of the timeshare and it will be resold at auction. If there's a balance due once the proceeds of the sale are applied to your debt, the lender may be able to get a judgment against you for that balance.

Timeshares have their place in the real estate market -- but the long-term costs of one can be prohibitive. Maintenance fees alone can be too costly to maintain as expenses rise in the timeshare location -- whether your income rises with it or not.

Because of the potential drawbacks, anyone considering a timeshare should do all the research they can about buy-in costs, maintenance fees and -- naturally -- ways to extract yourself for the timeshare if you can no longer afford it.

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