Personal debt forbearance options has been an area where many consumers have conducted research when they are either in a financial situation that does not allow them to currently meet all of their debt obligations but may find themselves in a better position in the coming months or weeks that would allow them to continue making traditional payments on debts such as home loans or credit cards. Forbearance opportunities on these forms of debt obligations are typically sought out in the hopes of delaying payments until a time where the homeowner or consumer can find a more stable financial ground, avoid missed payments, and potentially avoid damage to their credit score.
Yet, how consumers may qualify for either a forbearance on their mortgage or various debts, like credit cards, will heavily depend on their situation, credit history, and the potential that an individual has when it comes to continuing payments in the future. An article on Bankrate.com states that, “Lenders are more apt to grant forbearance to persons whose incomes have been reduced temporarily for any number of reasons such as job loss, unpaid mandatory leave, illness or other emergency.”
For this reason, consumers who have been looking into forbearance opportunities may find that if problems arising in their debt obligations as a result of poor financial practices, this opportunity to delay payments may not be available, but there are options for homeowners in need of mortgage payment forbearance and even traditional consumers who may simply need relief for a short period of time when it comes to meeting unsecured debt obligations.
When it comes to homeowners, as an example, there are some federal programs that may be helpful when factors like unemployment may be the underlying cause of their need for forbearance. The federal Home Affordable Unemployment Program has been set in place to help homeowners who have been unable to benefit from a home loan modification, which would simply lower their monthly mortgage payment, but still may have the potential to avoid foreclosure in the future if they could find assistance at the present time. This program offers a three month forbearance period for homeowners who qualify and may give some homeowners enough time to find an employment opportunity that will allow them to either qualify for a modification or continue making traditional payments on their mortgage.
Yet, some consumers struggling with credit card debt have simply turned to either their creditors or a credit counseling service as a way to negotiate assistance and forbearance plans on certain obligations. There have been some cardholders who simply called their lender, explained that there were financial hardships which arose in their life and forbearance would be necessary so that missed payments would not become problematic. Cardholders who may have a good payment history and credit score, who can show evidence of financial hardship, and who may be able to pay their debt in full if given this type of assistance are those who may have the best chance at receiving forbearance on their personal debts.
However, consumers who are looking for forbearance opportunities on either their mortgage or credit cards may want to avoid options like debt management or debt settlement initially, as these plans may not be necessary if simply speaking with creditors or consulting a credit counselor is the first action taken by a consumer. While more severe actions may be needed, like debt settlement, if a consumer’s situation becomes worse over time, but considering a simple forbearance has been helpful for consumers in the pas. Consumers must remember though, any opportunity for forbearance that is offered must be carefully reviewed by individual consumers to make sure that it is affordable for their particular financial situation and in their best interest.