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Restructure your mortgage
You may already know this but it is possible to get your mortgage modified so you won't lose your home. The federal government currently has two programs designed to help distressed homeowners. They are HAMP and HARP. HAMP (Home Affordable Mortgage Program) could lower your monthly payments to make them more affordable (under certain conditions), while HARP (Home Affordable Refinance Program) offers refinancing options for people whose homes are now worth less than what they owe.
Credit card companies will also negotiate
While the credit card companies are loath to talk about this, they are quietly negotiating with borrowers who are in trouble as this is better than giving up on billions of dollars in debts. They 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 are also willing to waive fees and even settle debts by accepting less than what is actually owed.
Something is better than nothing
The reason why card issuers are willing to restructure debts is simple. They would rather get something than nothing. However, most of these companies won't talk about this because they're concerned that they’ll be overwhelmed with requests from people who can't pay their bills. However, even industry executives have confirmed that restructuring credit card debt is becoming more and more common as the credit card companies see a higher percentage of charge-offs. In fact, in July of last year the charge-off rate on US credit cards were 10.52% of balances. And Moody's expects it to reach at least 12% in the middle of this year.
1.2 million accounts
A spokesperson for Bank of America has said that the company will probably modify about 1.2 million credit card accounts this year, which is an increase from 1.0 million last year. The card provider Chase has even made it easier for people in the earliest stages of delinquency to get their accounts modified. Last year alone, it restructured the credit lines of more than 600,000 customers.
How to get your debt restructured
If you have an overwhelming amount of credit card debt, you will need to contact your card issuers and basically plead for a restructuring. You could ask that your interest rate be reduced or your minimum monthly payments lowered. I read of one case where a credit card holder racked up thousands of dollars in debt to start a consulting business. The debt seemed manageable at the time until the interest rates on two of his cards jumped to more than 20%. He was able to get 12 months interest-free to pay back his debts but here comes the shocker – he had to agree to give up his credit cards.
How to escape debt hell
If you're like this person and have amassed thousands of dollars in debt with no way to pay it back, you should contact your credit card issuers and see if you can't restructure your debts. Barring that, you might contact National Debt Relief to see what it could do to restructure your debts. The company has helped thousands of families escape credit card debt hell and it could most likely do the same for you.