Many people facing financial trouble have never heard of a forbearance agreement. In short, a forbearance agreement is a deal between you and your lender that provides for temporary relief from a debt. Although they come in many forms, the basic idea is to provide you with a break from paying high monthly payments for a specified period of time.
One of the most commonly utilized types of a forbearance agreement is in mortgage debts. They are generally used to avoid foreclosure and can provide you with relief from a large monthly mortgage payment. When you negotiate a forbearance agreement with your mortgage lender you may be able to secure a reduction in the monthly payment, a waiver of delinquency fees or a complete suspension of mortgage payments for four or more months.
Credit Card Forbearance
Credit card debt is also manageable through forbearance agreements. Negotiating forbearance with a credit card company may require more effort, but is worth the trouble. Rather than missing payments and accumulating huge penalty fees, consider negotiating with your creditor to secure a forbearance agreement. You may be able to lower your monthly payment, lower the interest rate on your account or suspend your payment liabilities for up to 6 months.