Personal Debt Forbearance Plans From Creditors–How Timing And Credit History May Impact Assistance Options

Many consumers are aware of personal debt forbearance options that may be available from creditors, and as there are some positive reports that certain consumers are beginning to see fewer delinquencies arise and whittle down their debt in some areas, there are still consumers who may run the risk of missed payments or defaulting when financial stress in their life has created a situation where they simply cannot meet their obligations presently. Specifically in cases where a homeowner may have suffered a financial setback like cuts in their wages or a period of unemployment, there are some creditors who may be able to help prevent the adverse effects that can come from these problems through offering forbearance plans and hardship assistance programs, but timing and a consumer’s credit history may factor into what assistance options are available.

Obviously, if a consumer waits until they have missed a payment or two, has no money to present to a creditor as a good-faith payment, may have a poor credit history when it comes to making payments even when financial times are good, or in instances where a consumer simply has been seeking out assistance multiple times throughout their relationship with a creditor, it could be more difficult to get hardship assistance or forbearance options and these instances. However, when consumers take advantage of these opportunities successfully it usually comes down to the fact that they have addressed their issues in a timely manner and have worked during the lifetime of their relationship with the creditor to make sure they keep their debt obligations paid on time and in full.

Understandably, not all good customers have found a creditor willing to work with them during a rough financial patch but many consumers who may have credit card debts, as an example, could potentially find help through forbearance plans, rate reductions, or payment extensions that could help their affordability issues in a variety of ways. Obviously, some consumers may simply need a more affordable payment for a while but there are others who will need to suspend payments so that they do not run the risk of missing vital debt obligation payments that may be associated with secured debts like a mortgage.

However, contacting a creditor early to make sure that they will offer these plans could be helpful for a consumer as a credit counseling agency could be the next step if an individual is unable to find help from a particular creditor. Credit counseling could help the consumer find areas where they may be spending wastefully and, as a result of corrections that are suggested, consumers may find the funding they need to continue meeting payments on debts they may have found to be problematic.

What needs to be remembered though, consumers are not guaranteed this assistance but many creditors are willing to offer assistance programs where interest rate payments may be suspended, forbearance could be offered, or simple reductions in minimum payments may be offered as well so that a customer who has a good history of payments and can prove they have hit a difficult financial time due to factors like unemployment will be able to not only avoid damage to their credit score and further setbacks in their financial life but some creditors will simply offer these plans so that they can keep this particular client using their goods or services for a longer period of time.