Plead with your bank for hardship help

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Dear Debt Adviser,
I have lots of excuses for accumulating about $75,000 in credit card debt, but none of them help each month when all of my income — and sometimes more — goes to pay the minimums. A credit counselor has suggested I contact the companies for “hardship assistance,” but who do I call or write? Debt settlement seemed enticing, but I don’t like the thought of not paying on accounts until I have accumulated enough to pay a card off. What should I do? One emergency car repair or illness could trigger a domino effect and my house of cards will come tumbling down. Stress is starting to affect my daily life.
— Misty

Dear Misty,
Stress you say? I think I’d have a heart attack with that much credit card debt! Your minimum payments must be at least $1,200 and, depending on interest rates, could be up to $2,000 per month. I agree with you that without a proper savings cushion, you could very well be headed toward a major financial crash. And that is if nothing else in your life changes, like a layoff or a change in your interest rate due to the debt load you are carrying. All these are pointing to your need to find a solution for your large debt load sooner rather than later.

My guess is your credit counselor said to do more than contact your creditors for a hardship program. If that’s all they did, they were terrible. You should also have gotten a written plan with all your alternatives and a budget that helps you cut expenses.

Here’s my recipe for getting back in control of your finances. First, stop using credit … period. Next, dust off the counselor’s budget. If you didn’t receive one, go to a real counseling agency and get one. You can find one by visiting or Using the budget, allocate most of your nonessential income to paying down your debt. Save at least something in a savings account as well, because you might need it, since you won’t have your cards to fall back on anymore.

Allot each creditor a portion of your nonessential income. It must be a realistic, sustainable amount, because you are going to be using that amount as your offer when you call your lender to ask for a hardship program. You definitely do not want to be in a position of being unable to make payments if you can get your lender to agree to your request for a hardship program.

You are more likely to get into a hardship program if you have a hardship to tell them about, so have a brief description of your hardship written out so you don’t ramble. Now you are ready to call the customer service number that can be found on your monthly statement. You may need to ask for a manager to get the help you need. Be sure to let them know the monthly amount that you can afford to pay each month.

If the lender agrees, you will be placed on a repayment plan that should include changes to your current account terms. Ask for a written document detailing the terms of the program so there are no misunderstandings. And don’t miss a payment date. Not even by an hour, or all bets are off.

If they say no to your plea bargain, I suggest you ask an attorney for advice. An attorney may have more luck dealing with your creditors or they may advise you to consider a bankruptcy. I’d rather see you do that than go the debt-settlement route. Debt settlement requires a stash of cash to make it work and with your stress levels rising, you can imagine how difficult it would be to stop making payments and be subjected to collection activity or court summons while you’re trying to save up enough to offer them.

Take action today. I have a saying that I’ve been using for the last 20 years, “Unlike fine wine or my wife, debts do not improve with age.” Your stress will only increase if you procrastinate.

Good luck!