Forbearance is a situation where a lender decides not to exercise its legal right to foreclose on a property when a borrower defaults. Instead, the lender opts to renegotiate the terms of the loan to offer temporary relief to the borrower.
A hardship distribution is a withdrawal from a Section 401(k) plan made due to the distributee's immediate and heavy financial needs, not exceeding the amount necessary to satisfy such needs. Examples include medical expenses, post-secondary education fees, and preventing eviction or foreclosure of a principal residence.
Recasting a debt refers to the process of adjusting the terms of an existing loan arrangement, often undertaken to prevent default or alleviate financial hardship. This can include modifying the payment schedule, extending the loan term, or lowering the interest rate.
