hardship programs with the CC companies?

[twk001]

anybody have experience with them? do they REALLY work with you? we have about 40k to pay off between Citi and BOA. DH may lose his job at the end of the schoolyear. we are planning ahead, but need to be realistic that he may not find another teaching job. on my salary alone we cannot afford our living expenses AND full payment on these two accounts. we live pretty frugally as it is...

how do they work? any idea how they decide what you pay? our minimum payment for the two combined is almost $1000 per month. it would be lovely if they could cut that in half for 6-9 months

DH has already decided that if he cannot find another teaching job, he's going to enter in to a job re-career program at a nearby community college that has a 90% placement success rate, and the program lasts 12 weeks. it costs $5,000 which we can come up with...it trains for a field that is HUGE in our part of the country and the nearby plants are constantly advertising for job openings. they only accept 24 people per cycle of the program, but i know that DH (with 2 MA's and 4 yrs of plant work while in college) could qualify). of course, his income will probably be much less than a teacher, but you've got to re-start somewhere!!!

[1ke]

Internal hardship programs are typically less than one year and the criteria are proprietary so no one is going to be able to tell you exactly what will trigger a hardship path versus a collecctions path.

They typically can offer you a lower payment by offering lower interest for a period of time. Overall, what the CC compay can and can't do in this regard is regulated by the OCC (Office of the Comptroller of Currency). It is unlikely that the payments would be cut in half.

Credit counseling operates on a similar principle, but the credit counseling program can be 5 years long.

You cannot take two bites out of the apple, however. So, if you get on a hardship program you typically cannot then get on a credit counseling plan and vice versa. Also, if you miss payments you will lose your concessions on the hardship plan and they typically cannot be reinstated.

I suggest you think about going on an internal hardship program with 40K debt. You are not going to pay that down in only 6 months and you won't be able to get another hardship program from the companies, as they are regulated in this regard. A debt management plan through credit counseling may be a better option b/c you can get the reduced interest and waived fees for a longer period of time.