Borrowers who contact lenders before missing a payment receive significantly better options than those who wait, according to Jack Miller, principal of Gelt Financial LLC, a national private lender and distressed debt buyer. Miller argues that the conventional adversarial framing of foreclosure causes borrowers to misread the situation, costing them dearly. With rising rates and softening property values pushing more owners toward default, the single most underused tool available is a phone call made before a payment is missed.
Miller, who works with borrowers across commercial and residential default situations, says timing of communication with a lender is not a minor procedural detail but a determining factor in what options remain available. Borrowers who contact lenders five to ten days before a missed payment, with a clear explanation and concrete proposal, are treated as partners. Those who wait for the lender to chase them down are treated as problems. “You have much more credibility if you call today than waiting 30 days for the lender to chase you down,” Miller says.
In default situations, lenders retain significant discretion over whether to offer forbearance, modify loan terms, defer missed payments to the back end of the loan, or accept partial payment arrangements. That discretion is shaped by the lender’s assessment of the borrower’s reliability and intent. A borrower who calls ahead and acknowledges the obligation, communicates proactively, and arrives with a proposal demonstrates qualities that make a lender willing to exercise discretion in their favor. “The lender knows you care, you respect them,” Miller says. “It’s tremendous credibility.” The borrower who waits until the lender has sent notices, made collection calls, and potentially initiated legal proceedings has forfeited that credibility.
The difference between early and late contact determines which specific arrangements remain on the table. Miller describes several concrete options lenders consider when approached early by a borrower in good faith. A borrower three months behind might ask the lender to add missed payments to the back end of the loan and resume normal payments. A borrower who can only make partial payments might propose paying the regular installment plus an additional amount each month until arrears are cleared. “Most lenders will try to work with people,” Miller says, when borrowers “approach the lender with no nonsense, no excuses” and present a realistic plan. These arrangements are only available to borrowers who preserve credibility by engaging early. A borrower silent for six months, forcing the lender to initiate legal proceedings, asks for the same accommodations from a position of significantly diminished leverage and has added legal costs that make any workout more expensive for both parties. Once legal proceedings begin, the financial burden escalates rapidly. Miller notes that a borrower originally $6,000 behind may need to come up with $15,000 or more once attorney fees are added. “It gets much more complicated and expensive the longer you go,” he says.
Miller frames the tendency to avoid lender contact as a predictable human response to financial stress rather than a strategic choice. Borrowers behind on payments are often ashamed and uncertain, and calling the lender feels like an admission of failure. Many convince themselves that the situation will resolve itself before the call becomes necessary, but this optimism is usually misplaced. “It’s not realistic,” he says. The cost of avoidance compounds quickly as the lender’s posture hardens, legal timelines advance, and options narrow.
Gelt Financial works with borrowers in default, and according to Miller, early engagement consistently produces better outcomes than late-stage intervention. The firm encourages borrowers to reach out before situations deteriorate to the point where legal proceedings have begun. Miller recommends contacting lenders five to ten days before a missed payment – by phone, email, or both – with a brief, honest explanation and a proposed timeline for resolution. “Whatever happened, I was sick, I was in the hospital, I know it’s due July 1, I’m not going to be able to make this for 30 days,” he says, describing the direct communication that preserves options. As the volume of distressed borrowers grows, the distinction between those who communicate early and those who avoid contact is likely to widen further. For more on how Gelt Financial works with distressed borrowers, visit geltfinancial.com/lending.
