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Working Through Financial Difficulty

In a time of financial difficulty, establishing where your money is going is crucial to maintain peace, financially and mentally. Here are some things to consider if you are stressed about your financial situation.

Overcoming budgetary setbacks. The FDIC encourages banks to work with their customers experiencing financial difficulty, where possible. This may include delaying loan payments, extending the terms of a loan, or restructuring loan agreements. It is important to contact your bank to discuss your options before skipping any payments or taking any other action that differs from the terms of your loan. If you do not think you can make your loan payments on time, contact your bank as soon as possible to discuss your options. 

Beware of scams. Scammers try to profit from financially vulnerable people. Scams try to sell you services or products that sound good but only take your money, so be on the lookout. Do not provide bank account, credit card numbers, or other personal information over the phone or email, unless you can verify that the entity is reputable and trustworthy. 

Credit counselors and assistance with creating a budget or plan. With the help of a credit counselor, you can get advice on creating a budget and a plan to address your financial difficulty. This should allow you to organize your debts and establish a roadmap to paying them down. A credit counselor may also help you work with your financial institution. Counselors typically do not negotiate any reduction in the debt owed. However, they may be able to help make your monthly debt payments more manageable by negotiating extensions of the time that you can repay loans and working with your financial institution regarding fees and interest charges.  

What is mortgage forbearance? Mortgage forbearance is when your financial institution or lender agrees to allow you to temporarily make reduced mortgage payments or suspend your mortgage payments for a specific period. Forbearance may help you through your financial hardship by providing temporary budget relief or giving you additional time to catch up. Forbearance does not cancel the amount you owe to your financial institution. You will have to repay any missed or reduced payments in the future. 

Dealing with a debt collector. Ignoring or avoiding a debt collector will not stop their attempts at contacting you. The debt collector may even use other means to collect the outstanding debt, including a lawsuit. If you do not owe the debt, you should explain this to the debt collector attempting to contact you. If the debt is yours and you can't make payments, you may be able to make arrangements with the debt collector. You can also write the debt collector to stop contacting you, which will cease the communications; however, this does not necessarily stop other efforts to collect the debt. Debt collectors have several communication requirements. They are prohibited from contacting you at an unusual time or place and are prohibited from contacting you before 8 a.m. or after 9 p.m., generally. They are not allowed to harass you or anyone else through any form of their contact. If an attorney represents you, the debt collector must stop contacting you and contact the attorney instead.