How Can I Get Out of My Campground Membership?

Question:

Dear Steve,

If I default on my membership fee financing payments, and the CAMPGROUND cancels the membership agreement, does that also cancel the loan agreement for the membership?

They will not allow me to use it and said they canceled the membership agreement. Can they make me pay the entire financed amount if they cancel the deal? It’s been less than a year, and they turned me into collections for something that I will never be able to use.

Tricia

Answer:

Dear Tricia,

This sounds a lot like the type of product sold by Thousand Trails, National American Corporation, Leisure Time Resorts of America, Coast to Coast, Resort Parks International, Colorado River Adventures, Outdoor World, Adventure Outdoor Resorts, KM Resorts of America, Travel Resorts of America, and others.

What you describe sounds more like a membership with a financing agreement like a timeshare.

I can give you some general guidance without knowing what State you are in or the specific company.

If your State is like North Carolina, where I live, there might be state laws that govern campground memberships. The State treats these campground memberships much like timeshares.

I did find a copy of a Thousand Trails retail installment contract that had been filed with the Securities and Exchange Commission.

This is a good example of what your purchase agreement or financing installment contract might have contained.

Under the terms of the Thousand Trails contract, you are purchasing time and nothing else. The Agreement says, “Your membership constitutes merely a contractual license to use the facilities provided by Trails, NACO and/or Leisure Time from time to time at the preserves where you have membership rights. Such preserves and facilities are subject to change as provided in this Agreement and your membership does not constitute an interest in, is not secured by, and does not entitle you to any recourse against any real property of Trails, NACO or Leisure Time, nor are you entitled to vote on any aspect relating to the businesses of Trails, NACO or Leisure Time or to share in any of the profits of the businesses of Trails, NACO or Leisure Time.”

This and other similar agreements limit your ability to sell your way out of this situation. The Agreement says, “Your National Membership is transferable, subject to the following limitations. A National Membership: (a) may only be resold for a price which does not exceed the price paid by you for your membership plus a reasonable transfer fee as set forth below; (b) may be transferred only if the purchase price for your membership is paid in full and your annual dues are current at the time of transfer; and (c) may be transferred only if your transferee agrees to accept the rate of annual dues and use fees charged by us on new sales of similar memberships and the Member Rules in effect at the time of transfer.”

But let’s get to the heart of the issue, default. This particular Agreement says, “Should any “event of default” occur, we may immediately suspend your membership rights. In addition, upon the occurrence of any “event of default”, we may, upon 30 days’ written notice to you, declare the entire unpaid principal balance of the purchase price, together with the finance charge and annual dues accrued to the date of default, immediately due and payable. Moreover, we may continue to collect annual dues from you as they accrue for the balance of the initial term or renewal term, as the case may be.”

The Agreement goes on to say “If we terminate this Agreement and your membership because of your default, which we may, but are not required to do, we shall have all remedies provided by law. If any payment required by this Agreement is not made in full within ten days of its due date, you agree to pay us a late charge in the amount set forth in paragraphs 11 and 12. In addition, where permitted by law, reasonable collection charges will be imposed if any payment required by this Agreement is not made in full within 30 days of its due date and collection efforts are made. If permitted by law, a reasonable fee will also be imposed for processing any check or other payment that is returned unpaid. If this Agreement is referred to an attorney for collection after your default, or if a legal action is commenced to enforce or declare the meaning of any provision of this Agreement, the prevailing party will be awarded its reasonable attorney’s fees and costs, including fees and costs incurred in both trial and appellate courts.”

So, if we use Thousand Trails agreement as a guide, it would appear that members purchasing campground access in a similar fashion could have their membership canceled and still be responsible for the balance due on the original sale. In addition, an outside collection company and attorney might get involved, resulting in legal action and having to pay additional legal fees.

What You Need to Do Now

What I researched and showed you here is an example, but I have no idea what your membership agreement or purchase agreement says.

You should locate your documentation and read what it says. If you want me to read through it, I’d be happy to. Just upload the agreement to me here.

You should expect the company will report this default to the credit bureaus. It might even be that the amount you owe is substantial, and it might have to be legally eliminated using bankruptcy.

However, it is too early to make any assumptions just yet.

Sincerely,

You are not alone. I’m here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don’t give up.

Damon Day - Pro Debt Coach