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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.
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.
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.
The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.
Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.
The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.
The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.
The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.