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If you are in debt over your head and are finding yourself unable to even make the minimum payments, you can get help. One option is to request to be placed on your lender’s hardship program, which will re-age the account and lower your monthly payments. Many lenders offer these types of programs, including mortgage companies and credit card companies.

What is a lender hardship program?
Hardship programs are one way you can work with your lender to get yourself back on your feet. Lender hardship programs are for consumers who are faced with a difficult life event and can no longer make regular payments on their accounts. When you are placed in a hardship program, you agree to make regular payments, and the lender may reduce the interest rate or delay payments.

How can I request a lender hardship program?
The most important thing in requesting a hardship program is to communicate with your lender as soon as possible, before your account goes into collections. To request a hardship program, call your lender and find out what their preferred method of communication is. Some require a written letter, while others ask that you fax the letter. Make sure you get the appropriate fax number or address and retain a copy of the letter for your records.

When you write the letter, explain what has caused you to fall behind on your payments, whether it’s temporary or permanent, and what type of assistance will be helpful to you (e.g., a change in interest rate).  Explain that you do not want to default, and that you are eager to work things out. Keep in mind that while you want to explain your situation, your letter should be brief and to the point.

Once you and your creditor have agreed to the terms of a hardship program, your next step is to make your revised payments on time and as agreed.