If you are awash in debt, you probably understand the negative impact it can have on your mood, health, and everyday life. It can entail getting daily phone calls from tenacious debt collectors or having your boss inform you that your wages have been garnished. It’s waking up every morning feeling hopeless while carrying a heavy financial burden. Fortunately, there are solutions that can help you get back on track and provide peace of mind. Â
Restructure your mortgage
Did you know that it’s possible to have your mortgage modified to avoid losing your home? The following options are designed to help distressed homeowners who are struggling to make their monthly payments.
FHA Loan Modification
The purpose of the FHA Home Modification Program is to help current FHA loan borrowers by reducing the cost of their home loans.
Fannie Mae/Freddie Mac Flex Modification
These two private companies provide cash to lenders for the purpose of funding consumers’ mortgages at affordable rates. Guidelines are set by Federal National Mortgage Association (FNMA) and the Federal Loan Mortgage Corporation (FHLMC).
VA Loan Modification
This program allows active-duty service members, veterans, and eligible spouses to finance a home without a down payment or mortgage insurance. VA loans are guaranteed by the U.S. Department of Veteran Affairs (VA) and are only offered as a military benefit for qualified borrowers.
Credit card companies will negotiate
While many credit card companies are reluctant to talk about this, they are often quietly negotiating with borrowers who are in trouble. This is more lucrative for them than giving up on billions of dollars in debt.
Many companies are willing to restructure credit card accounts by either lowering the interest rates or the minimum monthly payments – at least for a specific amount of time. They may also be willing to waive fees and even settle debts by accepting less than what is owed.
Something is better than nothing
The reason why card issuers are willing to restructure debts is simple—they would rather receive something than nothing. However, most companies will not discuss this to avoid being overwhelmed with requests from cardholders who cannot pay their bills.
According to the most recent delinquency data from the Fed, the 30-day delinquency rate (or the percentage of total outstanding credit card balances currently at least 30 days overdue) rose from 2.09% to 2.25% in the fourth quarter of 2022.
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Credit card balances increasing
The Federal Reserve Bank also discovered that U.S. credit card balances rose to a whopping $986 billion in the fourth quarter of 2022. The inflation that followed the COVID-19 pandemic made necessities like groceries unaffordable for many, leaving them no choice but to put the expenses on their credit card(s). Fortunately, there are options for those struggling to keep up with their monthly payments. Debt restructuring is one of them.
How to get your debt restructured
If you are struggling with an overwhelming amount of credit card debt, you should contact your card issuers and request a restructuring. You could ask that your interest rate be reduced or have your minimum monthly payments lowered. Be forewarned that in many cases, the debt could seem manageable until a credit card holder racks up thousands of dollars. Interest rates jump and you’re in the red. Â
Seeking help
If you have amassed thousands of dollars in debt and are struggling to pay it back, you should contact your credit card issuers and see if you can restructure your debts.
If the creditor refuses to negotiate, you can contact National Debt Relief to see what we could do to restructure your debts. The company has helped 500,000 people pay off credit card debt. Find out if they can do the same for you.
