Are you unable to pay off a large loan? You're not alone. Unfortunately, many people can't pay off loans thanks to unexpected issues like job loss, medical bills, divorce, and more. If you're late on payments, it's not too late to take action. Here's what you need to know if you're delinquent on a large loan.
What Happens if You're Delinquent?
If you're behind on payments, there's a good chance you're delinquent. Loans are delinquent as soon as you miss a payment. Missing a loan payment can have severe consequences. You may be charged a late fee, be reported to a credit bureau, or have your loan move into default.
Default occurs when a loan hasn't been paid off for an extended time. The timeline depends on the loan. Federal loans, such as student loans, move into default if they are delinquent for 270 days. Mortgage default typically occurs when you miss a second payment.
The consequences of defaulting on a loan are more severe. Your lender may use a debt collector to recover the payment. At this time, you may be taken to court. If you do not make a payment, the lender has the right to seize your property. You might face a lien on your house or a seizure of your assets. You can also experience a drastic hit to your credit that lasts for years to come.
Steps to Take if You're Delinquent
If you know you won't be able to make a loan payment, you must contact the lender right away. Be honest about your situation, and ask if they can do anything to assist you. Some lenders may offer deferments or temporary relief, depending on the circumstance.
You should also contact a lawyer—especially if you've been threatened with legal action. You might be resistant to spend more money on an attorney. However, they can provide you with expert legal knowledge that could end up protecting your assets, preventing foreclosure, and obtaining a loan modification.
If you're behind on loan payments, the Law Offices of Melvin Monachan, PLLC is here to help. We have the tools to protect your interests, prepare necessary documents, and push back against lenders. Call us at (516) 714-5763 to schedule a consultation.