Can You Go To Jail For Foreclosure?

Here you will find a breakdown of how foreclosure works and whether or not you might end up seeing jail time for it.

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Foreclosure is a stressful and confusing time in someone's life. You will feel like your world has been turned upside down, it's a very stressful time and it can feel like there isn't anyone there to help. Luckily, this article is! Here you will find a breakdown of how foreclosure works and whether or not you might end up seeing jail time for it.

Towards the end, you will also find some tips to help avoid foreclosure or halt it altogether. Just remember, foreclosure isn't final until it's final. There are things you can do, there are ways to fight it, and you should always do what you can to protect yourself and your assets.

Table of Contents

What is foreclosure?

Foreclosure is the act of having your house foreclosed on by the bank. When you take out a mortgage on a house, you are agreeing to pay off a loan in monthly installments in return for enough money to buy a house. The bank makes this investment in you, assuming they can make their money back plus some interest. A win-win for everyone. However, when the homeowner can no longer afford to pay off your loan to the bank they suddenly start losing money on their investment. So, they foreclose the house. They take ownership of it and sell it off to cover the rest of your debt. This is completely legal and explained to you when you sign the contract for the mortgage.

What are some repercussions of foreclosure?

There are a few repercussions of having your house foreclosed on that you should be aware of. First, you are going to be homeless. The bank doesn't have to provide you somewhere else to stay, they only need to give you a quick heads up before they can have you forcibly removed. You'll be lucky to get 30 days in most cases. This is why acting fast is so important to protect yourself. As well as being homeless, you might find that your debt follows you. Depending on how much you owe and why you can't pay it back, you may be held accountable for any excess debt you may owe. If the bank fails to sell the house for enough to cover the loan. Well, you might find that you are still on the hook.

Can you go to jail for a foreclosure?

The chances of you going to jail are slim to none. The bank signs a contract too. They know the risk they are taking when they loan you the money. If they were to press charges for a simple failure to pay that would be unfair and predatory. That being said, there are cases when you might go to jail. For example, if you can afford to pay but refuse to do so the bank can sue you and there may be criminal charges.

Or, perhaps you could have paid but instead spent your money on a lavish vacation. The bank can sue.

Or, you damage the house so badly that the bank cannot sell it to make their money back. You might face jail time. If the bank does try to take you to court, it’s best to hire a lawyer. They will steamroll over you otherwise.

How can you avoid foreclosure?

The best way to avoid a foreclosure is by paying your bills on time. This might sound obvious, but many people wait for the bank to send them a warning before they end up paying. This is the worst way to go about doing things. If you are someone who regularly pays on time, in full, the bank is more inclined to trust you. In most cases, missing even a couple of payments is grounds for foreclosure. If you have been someone who otherwise pays on time, the bank is more likely to cut you some slack. They may help you refinance/remortgage your home to make the payments more affordable. They may even in some cases freeze payments altogether. Due to Covid-19, many countries have made it law that mortgage payments must freeze. This is not the case in America, but, it might be possible in your case. There is no harm in asking.

Can you stop foreclosure from happening?

There are a few ways to stop your foreclosure from happening. Primarily, paying off the loan is your goal. You could get a mortgage from another bank to pay off the first one. Though this is rare. Most likely, you will want to seek out the help of a debt relief company. Some companies specialize in buying the homes of people who are about to be foreclosed on. These companies pay off the loan to the bank and allow the owner to continue living there as a tenant. Eventually, the tenant can then buy back their home. This is what can be called a no-lose scenario. Everyone profits off this agreement. The homeowner keeps their home in principal, later buying it back. The bank has its costs covered. And the company that purchases the home has a new investment property with a reliable tenant.


So, no you cannot go to jail when your home is foreclosed on. Unless of course, you have been incredibly negligent in your ownership of the home and your effort to make good on your loan. Having your home foreclosed on can leave you with a lot of debt and horrendous credit. Bad credit can stop you from buying another home, a car, or even getting a job. Companies check things such as credit scores before hiring. They say they don't, but they do. Finding someone willing to help is so hard, that if you do find one you should jump on the chance. Hopefully, this article has answered any questions you may have had if you are still unsure you can always contact your bank to discuss the situation. Though, it's probably best to go through a lawyer if you think you may be at risk of being sued or charged.

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