Soon after his marriage, Udit Arora took a Rs. 50 lakh bank loan in 2008 to buy a two-bedroom apartment. He was earning a handsome salary and paying the home loan EMI was easy. That was till he got laid off recently. The bank has not been able to reach him after he defaulted on his last EMI payment. A worried Arora fears that the bank will now start harassing him. Will the bank seize his property if he misses two or three EMIs? He does not know what to do though he is keen to keep the property. Arora must realise that just as he wants a way out of this situation, it is also not in the bank’s interest to foreclose the loan. Banks are typically more interested in recovering the money than in starting legal proceedings as the procedure of attaching and auctioning a house is lengthy. The bank will be open to negotiation. It will typically not immediately repossess Arora’s house. However, if he continues to default for the next six months, the bank may initiate foreclosure formalities. Arora’s trouble is a very high EMI and shortage of funds. Though finding another job may not be difficult, he fears he may not be able to get a similar salary as in his previous job. In such a case, he can approach the bank to restructure his loan. For example, let us assume he currently pays Rs. 10,000 as EMI for 20 years. The bank might offer him an EMI of about Rs. 6,000, for 30 years. His EMI will go down, giving him some breathing room and the bank will not lose money either. It’s a win-win situation for everybody. However, such a restructure under stress may cost Arora more in terms of total money repaid. Arora must realise that this arrangement will give him much-needed breathing room, which is his current priority. Arora might also ask for deferral of payments. The bank may grant relief, considering his past payment history and genuineness of the problem. He could also use the funds received as severance package to prepay a part of his loan, which will in effect lower his EMI. Also, there are debt counselling centres to help Arora restructure his loan. They would provide him the appropriate restructure and refinance options based on his personal cash flow and asset-liability situation. Continuing to remain a defaulter and not contacting the bank can only make his relationship with the bank, and his credit scores, worse.