Debt Repayment Assistance For The Unemployed–Will Creditors Offer Relief For Jobless Consumers To Avoid Missed Payments?

Here in early July we saw that the unemployment rate increased as there was some stalling in the job market recovery, which some analysts feel may continue, while others believe will soon improve as we go further into 2011. Yet, when it comes to questions over what the unemployment situation and job market might look like in a few weeks or months, the answers are never really clear but when financial relief for men and women who are currently unemployed is needed, there may be help from an unlikely source.

Debt repayment assistance is one factor of unemployment that worries many consumers as those who are out of work are not simply worrying about healthcare costs or retirement plans, but the majority of these individuals are just wondering how they’re going to pay their bills while still looking for work. Some have been fortunate enough to find part-time jobs or even a job that may pay less than they originally earned, but there are still those who are without any income whatsoever or may simply be relying on unemployment benefits to meet their financial needs. Yet, the unlikely source where this help may come from is a consumer’s creditors, as there are some companies, like credit card lenders, that may offer hardship assistance to those who are in need.

It should be understood that this is no guarantee as there are those creditors who are simply unwilling to work with a consumer no matter what their situation may be, but some consumers may be able to simply contact their creditor directly, explain their situation, and while there may be requirements like showing a reduction in a consumer’s income or proving hardship, some consumers may be able to get a lower payment on their monthly debt obligations. Understandably, when it comes to options like credit cards, carrying a balance could potentially lead to difficulties if a consumer is continuing to live off of credit, as minimum payments may be easily met but interest rates could cause the overall costs to increase.

While there are options like a debt management plan that may be available from a credit counseling agency, which will essentially work out similar agreements with creditors and debtors, this works in a similar fashion as some hardship programs that creditors may have in place, so consumers may benefit from simply talking to their creditor directly. Understandably, some consumers may be in a position where this could hurt their credit score, as a credit card lender, as an example, may require that a consumer cancel their credit card so that lower payments may be offered, but when it comes to either defaulting entirely on debt or seeing a setback in one’s credit score and history by negotiating more affordability, there have been those who were willing to make that trade-off.  Of course, this may not be ideal for every consumer, nor the best route for some, as simple credit counseling and budgeting could help consumers meet their debt repayment obligations.

What consumers who are unemployed must remember is that options which may look attractive, like debt settlement, will not necessarily be in their best financial interest and may need to be used as a very last resort, but if a consumer has a good payment history they may find that being upfront with their creditor about their financial situation and express their willingness to pay their debt in full, it could lead to more affordability on their credit obligations while they are suffering a setback in their career and personal finances.