Q: My husband lost his job, and we have high credit card debt. We have enough to get through three to four months without digging into more debt or our retirement accounts. Is it ok for me to call and see if our credit unions will do a debt management plan or forbearance plan? Will this show up on our credit report and affect potential employment? We owe about $27,500.
A: There are so many people across the country dealing with unemployment, through no fault of their own, that many financial institutions are getting very used to working with folks in your position.
So, it’s absolutely okay to contact the creditors or, in this case, your credit union to ask for a reprieve. Look, there’s no harm in asking. The worst they can say is “No.” But, you might find they will lower what you owe or allow you to stop making payments for a little while.
But, let’s say the worst happens, and they reject your request for reduced payments or a forbearance. Then try going to the National Foundation for Credit Counseling’s Web site and find a nonprofit credit counselor in your area that may help negotiate a deal for you.
Even if that doesn’t work, you may just have to let the credit card debt go unpaid while you pay for just the bare essentials. When your money is tight, like you’re experiencing, it’s a matter of survival to use whatever cash you have to buy food, keep a roof over your head and pay for necessary utilities.
But, I wouldn’t cry poor if you are still eating out or have cable or expensive cell phone bills. Those things go too.
The important thing is to talk to your creditor(s). Let the company know what’s going on. It’s not that you don’t want to pay your bills; it’s that you just don’t have the income. Court action is often taken when people don’t communicate.
So yes, communicate and keep communicating with your creditors until your situation improves and you can start paying your bills as agreed.