Can't pay the mortgage — practical solutions before the bank acts

Lost your job, illness in the family, divorce — life sometimes makes mortgage payments impossible. The worst thing you can do is hide from the bank. Here's what to do.

Day 1: Talk to the bank

The moment you realize you'll have trouble paying, contact the bank. Banks don't want to take your house — foreclosure is expensive and slow for them too. They'll usually offer:

• Payment deferral (odklad splátek) — 3–12 months pause, principal accrues
• Term extension — same balance over longer period = lower payment
• Interest-only period — pay only interest for 6–12 months
• Refinancing at lower rate (if possible)

If trouble is temporary (1–6 months)

Best solution: payment deferral. By Czech law, banks must offer up to 6-month deferral in defined hardship circumstances (illness, unemployment, family death). Outside those, bank can still offer voluntarily.

Use savings to cover essentials. Cancel non-essential subscriptions. Reduce expenses to minimum.

If trouble is long-term (6+ months)

Restructuring helps but doesn't solve fundamental affordability gap. Options:

• Sell the property voluntarily — get fair market price, pay off mortgage, walk away (or with remainder if sold below)
• Refinance with lower payment — extend term to 30+ years if not already
• Insolvency / personal bankruptcy — last resort, has tax and credit implications

Voluntary sale is much better than foreclosure — you keep more proceeds and avoid 7-year credit blacklist.

Don't ignore the bank

Missed payments → notification → 3 missed payments = default → enforcement notice → foreclosure auction. Total time: 6–18 months. By the time the auction happens, the property may sell at 60–70 % of market value, you lose all equity, and you have a debt for the remainder.

Talking to the bank early prevents this entire chain.

FAQ