How to Request a Lender Hardship Program
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 (though not all) 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'll typically agree to make regular payments. To assist with your hardship, the monthly payment amount, interest rate, or both may be reduced.
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 may allow you to complete your application over the phone.
Others may require a written letter. Make sure you get the appropriate fax number or address and retain a copy of the letter for your records.
How to Write a Hardship Letter
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.
To recap, your letter should include the following:
- Your name
- Your account number
- What's changed in your circumstances (loss of income; new, unexpected source of expense)
- What you're asking for
Most hardship programs have built-in guidelines, so this is less a matter of negotiation than a question of whether or not you qualify for the program.
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. Failing to make payments may cause your hardship agreement to be voided, meaning you'll be back on the hook for your normal payments. Be sure to review your monthly statements to make sure that your hardship agreement is correctly reflected.
What if I don't qualify for a hardship program?
If your lender can't help you, you may need to seek outside aid. If your issue is with your mortgage, look into foreclosure counseling to learn about your options. If the issue is with your credit card debts, work with a credit counselor. You may qualify for a debt management plan instead, which can help reduce interest rates and create a more affordable payment.