What is an alternate term for a loan default situation when payments are not made on time?

Delinquency is the term used to describe a situation where payments on a loan, such as a mortgage, are not made on time. This term specifically refers to the late payment status, indicating that the borrower has missed scheduled payments but may not yet have reached the stage of foreclosure, which is a legal process initiated by the lender to reclaim the property after a prolonged period of non-payment.

In contrast, foreclosure is the legal process that occurs after a borrower has defaulted and is unable to cure the delinquency, leading the lender to take possession of the property. Bankruptcy, on the other hand, involves a legal proceeding concerning an individual's or entity's obligations and does not specifically refer to missed payments. Refinancing is a financial strategy to replace an existing loan with a new one, often to secure better terms, but it does not pertain to situations of default or missed payments. Therefore, delinquency accurately represents the state of being behind on payments without the escalation of legal action that accompanies foreclosure.