Who is your lender? Have you checked their website? Do you have equity?

They should have a section on their website that tells you exactly what they need from you (a letter, monthly budget, value of home etc).Write down what has change finacially and what you plan on saying when you call. They will tell you what they need, and then they will lose that paperwork, then you will send it again, but some law will change and you"ll have to reapply. After several months you'll be so desperate you'll take whatever reduction they will give you, even if it's only $100. Oh wait, thats just what happen to me!!

No, but seriously it is worth a try, it's kind of luck-of-the draw but they could help you out a lot. It is scary making that first call but you will just be talking to an employee who has a list of things to tell you/ ask for and will not be judging your case personally.

Can you get by without using your credit cards?

 

You can contact a nonprofit credit counseling agency and get a free consultation to find out what they can do for you. After you go through your credit cards one by one - tell them the balances and interest rates, they will give you a proposed monthly payment based on the reduced interest rates and fees that they are typically able to get for their clients. There's only one hitch - you cannot go on one of their programs without verifiable income.

That's one way to do it. You then pay one monthly payment to the credit counseling agency and they make payments to your creditors with typically lower interest rates.

Just make sure that the credit counseling agency you contact is nonprofit and has an excellent BBB rating.

 

I had great success with Chase (3 different credit cards with them). I simply called customer service and told them our income is lower than when we initially obtained the cards years ago. Also mentioned that we were really going to have to consider stop making minimum payments. They were glad to help and only asked for updated income over the phone, never had to show proof. With Chase this was called their "Balance Liquidation Program". They got us down to a reasonable fixed minimum payment that is set at 6% til we're done. Once you miss a payment, you are out of the program and back to original terms, so be careful. I also think you have to agree to have the account closed when you sign up for this program, which was good for us because we had committed to stop using credit cards no matter what.

 

Have no advice on how to talk to the companies, although it seems in what I've heard that they are pretty good with allowing lower rates and payments if you really can't make minimum anymore. My only real advice is to get Dave Ramsey's books and put it into practice. It is designed to help you get out of the situation you're in and get out of debt.

 

Keep in mind that using a credit consolidation company or credit counseling service has the potential to adversely affest your credit as well. This is what happened to me. I had to do it just getting out of college and a few years later, when my husband-to-be and I applied for a mortgage, I was told that my participation in that credit counseling damaged my credit as it was viewed as a step away from bankrputcy. We ended up having to put the mortgage in my DH's name only.

I would talk to the credit card issuers directly first to see if you can work something out and only use an outside agency if nothing else works. Something to consider...

 

Chase rocks, I also have had a great experience with them and their "Balance Liquidation Program". I had stopped making my minimum payments when I became a single parent thinking I had no other option. They called and asked why, I was honest and they said I would probably qualify. To be honest I lied about my income a little because I knew they wouldn't take into acount that I live in a high COL area, but not by much. I had a nearly $2000 balance and they gave me a 2% intrest rate and $33 a month payments. I have them directly taken out of my account and they call me every 18months to re enroll the direct payments. I have missed a couple of payments too and they are always really nice about it and just get me set right back up (sometimes I have to pay two months in 1 because of it but I've never been kicked off the program!). And the card is reported to the credit reporting agencys as "pays as agreed".

Wells Fargo on the other hand was pretty terrible about it.