Loan Default Negotiations: What Options Do Borrowers Have?

Article Summary

A loan default does not automatically mean that your lender can immediately repossess your property or force a mortgagee sale. In many cases, borrowers can still negotiate with the bank after a loan default, particularly if they act promptly and present a realistic proposal supported by current financial information.

Depending on the circumstances, available options may include temporary repayment arrangements, hardship assistance under the National Credit Code, loan restructuring, refinancing, or negotiating sufficient time to complete a voluntary sale. Consumer borrowers may also have important statutory rights under the National Credit Code, including the ability to give a hardship notice and request that the credit provider consider changes to the credit contract.