Foreclosure

Foreclosure summary:

  • Generally, a borrower must be at least 120 days (four months) behind on payments before a lender can start the foreclosure process. 

  • If you’re struggling to keep up with your mortgage, communicate with your lender. They may offer a hardship program to help you get back on track financially and avoid foreclosure. 

Foreclosure definition and meaning 

If you stop paying your mortgage and miss several payments, your lender may initiate a foreclosure. If you can’t afford to make your mortgage payment, you should contact your lender right away to talk about the options that could help you avoid losing your home. 

Foreclosure: A comprehensive breakdown

A foreclosure can be devastating. Besides causing emotional distress, having a foreclosure on your credit report could make it challenging to qualify for financing in the future. A foreclosure can stay on your credit report for up to seven years. 

Missing one mortgage payment won’t trigger a foreclosure. But missing several payments could put you at risk. Generally, a lender won’t initiate a foreclosure until a borrower is at least 120 days (four months) behind on payments. 

You can’t settle mortgage debt. You have to find a way to get caught up on payments, even if that means selling the home to satisfy the loan. 

If you’re struggling to afford your mortgage payments, don’t give up hope. The best thing to do is contact your mortgage lender right away, before missing a payment. Many mortgage lenders offer hardship programs to help you stay on track with payments and keep your loan in good standing. In some cases, the lender might even consider modifying the terms of your loan in such a way that it makes the loan more affordable for you.

Here are some ways to avoid foreclosure. 

Forbearance

Many lenders allow borrowers to apply for a forbearance, which could provide a temporary payment pause. If you’re eligible and approved for a forbearance, it could give you some breathing room to sort out your finances. But it’s only a temporary solution. 

One thing to be aware of is that even if your lender allows you to skip one or more payments, you might be expected to get fully caught up on those payments once the forbearance ends. 

For example, let’s say your payment is $1,500 a month and your lender’s hardship program allows you to skip three payments. If the program has a payment catch-up requirement, you’ll have to make a $6,000 payment in month four. This kind of hardship program isn’t appropriate for all situations.

Bankruptcy

Filing for bankruptcy temporarily stops all collections, including foreclosure. When you file for bankruptcy, the courts will issue an automatic stay. This means creditors must stop contacting you to collect debts. This could give you more time to get your finances in order so you can catch up on mortgage payments. 

Loan modification

If you're having a hard time paying your home loan, your lender might be willing to change the terms. Mortgage modification changes the terms of your loan to make payments more affordable, such as by lowering the interest rate. Loan modifications are rare.

Debt resolution

Debt resolution means negotiating with your creditors to accept less than the full amount you owe, but consider it payment in full. 

To be clear, debt resolution is not an option with mortgages. Unsecured debts like credit card debt, loan debt, and medical debt are good candidates for debt resolution. 

If your budget is strained, resolving unsecured debts could help you get back on your financial feet. For example, if you get rid of credit card debt or medical debt, that could free up money to keep up with your mortgage payments.

Foreclosure FAQs

Yes. Filing bankruptcy creates an automatic stay, which immediately stops evictions and foreclosures. However, your lender or landlord can ask the court to lift the stay. If the request is granted, your landlord or mortgage company can resume the eviction or foreclosure.

Deferment and forbearance allow you to temporarily pause loan payments. If interest continues to accrue while your loans are deferred or in forbearance and you don't make any payments toward the interest or principal during this time, that could leave you with a larger loan balance to repay. 

You can keep your home in a Chapter 13 bankruptcy. Chapter 13 can help you avoid foreclosure if you're behind on your mortgage payments. That’s because you can add the past-due amounts to your plan and catch up over several years. However, you must continue to make your mortgage payments going forward to stay out of foreclosure.

Related Articles

debt-hardship-program.jpg

Debt hardship programs can help you get back on track if you've fallen behind on credit card or loan payments.

what-does-it-mean-to-default-on-a-loan.jpg

Missing a payment doesn’t mean you've defaulted on your loan, but it’s a warning sign. Learn how to prevent loan default, and what to do if default happens.

mortgage-debt.jpg

Managing a mortgage could mean revamping your budget, streamlining your other debts, or even asking your lender for help. Learn more.

Personal loans are available through our affiliate Achieve Personal Loans (NMLS ID #227977), originated by Cross River Bank, a New Jersey State Chartered Commercial Bank, Equal Housing Lender. Loan applications are subject to credit review, underwriting criteria, and approval. Loans are not available in all states and available loan terms/fees may vary by state. Loan amounts range from $5,000 to $50,000. For loans $35,000+ must have a minimum 660 credit score. APRs range from 8.99% to 29.99% and include applicable origination fees that vary from 1.99% to 8.99%. Repayment periods range from 24 to 60 months. Example loan: four-year $20,000 loan with an origination fee of 8.99%, a rate of 15.49%, and corresponding APR of 20.77%, would have an estimated monthly payment of $561.60 and a total cost of $26,966.26. To qualify for a 8.99% APR loan, a borrower will need excellent credit, a loan amount less than $12,000.00, and a term of 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to pay off qualifying existing debt directly; or showing proof of sufficient retirement savings, could help you also qualify for lower rates. Loan Consultants for Achieve Personal Loans are available Monday-Friday 6 AM to 8 PM AZ time, and Saturday-Sunday 7 AM to 5 PM AZ time.

Home Equity loans are available through our affiliate Achieve Loans (NMLS ID #1810501). Equal Housing Opportunity. Offers may vary and all loan requests are subject to eligibility requirements, application review, loan amount, loan term, income verification, and lender approval. Product terms are subject to change at any time. Offers are a line of credit. Loans are not available to residents of all states and available loan terms/fees may vary by state where offered. Line amounts are between $15,000 and $300,000 and are assigned based on product type, debt-to-income ratio and combined loan-to-value ratio. 10, 15, 20, and 30-year terms available. Minimum 600 credit score applies for debt consolidation requests (20 and 30 year terms require a minimum credit score of 640), minimum 700 applies for cash out requests. Other terms, conditions and restrictions apply. Fixed rate APRs range from 6.74% - 14.75% and are assigned based on underwriting requirements and offer APRs assume automatic payment enrollment which may provide a discount (autopay enrollment is not a condition of loan approval). All terms have a 5-year draw period with the remaining term being a no draw period. Payments are fully amortized during each period and determined on the outstanding principal balance each month. Closing fees range from $750 to $6,685, depending on line amount and state law requirements and typically include origination (3.5% of line amount) and underwriting ($725) fees if allowed by law. Property must be owner-occupied. Combined loan-to-value ratio may not exceed 80% (20 and 30 year debt consolidation requests may not exceed 75%), including the new loan request. Property insurance is required and flood insurance may be required if the subject property is located in a flood zone. You must pledge your home as collateral. Loan funding time is dependent on full application and documentation submission, average funding time is 11 business days for 2025, including rescission. Monthly/yearly savings claim is based on average monthly debt savings from originated loans for Q4 2024. Monthly/yearly savings varies based on each loan situation and can be more or less than $800/$10,000. Requirements to obtain 6.74% APR include: debt to income ratio <=15%; cumulative loan to value <= 50%, including new request; loan amount between $15,000 and $150,000; term of 10 years; FICO of 800+; and automatic payment enrollment. Contact Achieve Loans for further details

Affiliated Business Arrangement Disclosure: Achieve.com (NMLS #138464) and Achieve Loans are both wholly owned subsidiaries of Achieve Company. Because of this relationship, your referral to Achieve Loans may provide Achieve.com a financial or other benefit. Where permitted by applicable state law, Achieve Loans charges: 1) an origination fee of 3.50%, and 2) an underwriting fee of $725. You are NOT required to use Achieve Loans for a home equity line of credit. Please click here for the full Affiliated Business Arrangement disclosure form. Please click here for the full Affiliated Business Arrangement disclosure form.

Resolution is available through our affiliate Achieve Resolution (NMLS ID # 1248929). All estimates for Achieve Resolution’s services are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. Not all Achieve Resolution clients are able to complete their program for various reasons, including their ability to save sufficient funds. Achieve Resolution does not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. Achieve Resolution does not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Achieve Resolution’s services are not available in all states, including New Jersey, and their fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of Achieve Resolution services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements Achieve Resolution obtained on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.

© 2025 Achieve.com. All rights reserved. NMLS #138464