As national unemployment hovers around 7.9 percent, many Americans struggle managing debt without a steady source of income. While it may seem that debt management options are limited when unemployed, several strategies including loan modification can help ease outstanding balances. Many who have been jobless for 27 weeks or longer must reconsider their daily budgeting to make ends meet while paying off debt.
Seeking a Loan Modification
Americans stagger under the weight of either credit card debt or mortgage debt. After prioritizing existing debts, many will find that paying off their mortgage is the primary focus. Fortunately, for the 5 million homeowners burdened with their mortgage payments, loan modification is a debt management option that makes overhead expenses controllable.
When presenting your case for a loan modification to your lender, remember to:
- Write a polished hardship letter. This letter should explain to your lender in-depth why you fell behind on your payments. Whether it’s because of unexpected unemployment or a health crisis, detail the exact outline of why and when you began falling behind. As always, concise letters are typically the most effective.
- Include essential documentation. When you send the hardship letter and the completed loan modification package to your lender, be sure to include paycheck stubs, your budget, and any other documents requested. Any missing information will result in your application being placed on the bottom of the stack, thereby delaying one of your most effective debt management options.
- Leave a paper trail. Whenever dealing with important financial matters, it’s important to document everything. Any time you speak on the phone, document the date, time, and whom you spoke with. Certify any mail that you send them to ensure it’s been received. If you’re serious about pursuing debt management options such as loan modification, tracking your moves like a private investigator will ensure you are keeping accurate track of the status of your case.