How to Get Your Debt Payments Reduced after a Job Loss

Financial emergencies caused by job loss can be managed effectively if you are willing to take creative action. One such creative move is to get your consumer debt payments reduced until such time as you are able to resume regular payments. Here's what to do.

Instructions

1

Call your bank, credit card company and other lenders to see how much you could save by making interest only payments on loans and credit card debt. Depending on what you owe, interest only payments can save you a lot of money and help you live within your means. For example, let's say you owe $1,000 and are currently paying $90.26 per month in principal and interest (15%). If you are able to negotiate interest-only payments you will pay only $12.50 per month which is a savings of $75 per month. This can offer much needed relief from debt interest.

2

If interest only payments are not possible, try to negotiate a reduction in bank debt and credit card payments by spreading them over a longer term.

3

Ask your mortgage company for a forbearance agreement, which allows you to pay a fraction of your monthly mortgage payment until you start to work again. Most mortgage companies are more than willing to negotiate debt payments to prevent foreclosure.

4

Contact all utility companies including wireless phone services to work out a budget program; then make your payments as promised.

5

Get debt counseling. Contact the Consumer Credit Counseling Service (CCS) in your area for free debt advice. They will provide the debt help you need to revise your household budget, negotiate reduced loan payments, avoid foreclosure or find a bankruptcy alternative.

6

Repair your credit once you've found a new job. Write a 100 word statement to be placed permanently into your credit report, explaining the financial hardship you experienced as a result of job loss. Negotiate a debt repayment plan.