What Is a Hardship Program?

Life doesn’t always go according to plan. A job loss, a medical emergency, a divorce, or any number of unexpected events can make it impossible to keep up with your debt payments. If you’re in that situation, you might not know that many creditors offer hardship programs — formal arrangements designed to help you stay afloat during tough times. These programs won’t erase your debt, but they can make it a lot more manageable while you get back on your feet.

What Is a Hardship Program?

A hardship program (sometimes called a financial hardship plan or forbearance program) is an agreement between you and your creditor that temporarily changes the terms of your debt. Creditors offer these because it’s often better for them to get reduced payments than no payments at all.

These programs are not advertised loudly — you usually have to call and ask for them. But most major credit card companies, banks, and lenders have them available.

What Hardship Programs Typically Offer

The specific relief varies by creditor, but common benefits include:

• Reduced interest rate. Your APR may be lowered significantly — sometimes to single digits or even 0% — for the duration of the program.
• Lower minimum payments. Your required monthly payment may be reduced to a level you can manage.
• Waived fees. Late fees, over-limit fees, and penalty charges are often paused or forgiven.
• Paused collection activity. If your account is already past due, the creditor may halt collection calls and letters while you’re on the program.
• Account brought current. Some programs re-age your account, meaning it’s reported as current to the credit bureaus once you start the program.

Most hardship programs last 3 to 12 months, though some can be extended depending on your situation.

How to Apply

Applying for a hardship program is usually a phone call, not a formal application. Here’s how to approach it:

1. Gather Your Information

Before you call, know:

• Your account number and current balance
• Your monthly income and essential expenses
• The reason for your hardship (job loss, medical emergency, divorce, etc.)
• How much you can realistically afford to pay each month

2. Call the Right Number

Look for a customer service number on the back of your credit card or on your loan statement. Some issuers have a dedicated hardship line. You can also try searching “[creditor name] hardship program” online.

3. Explain Your Situation

Be honest and straightforward. You don’t need to share every detail of your life — just explain what happened and why you’re struggling to make payments. Use plain language:

“I recently lost my job and I’m having difficulty making my payments. I’d like to know what options you have to help me during this time.”

4. Ask Specific Questions

• What reduced interest rate can you offer?
• Will my minimum payment be lowered?
• How long does the program last?
• Will my account be reported as current to credit bureaus?
• Are there any fees or penalties for enrolling?
• What happens when the program ends?

5. Get the Terms in Writing

If you’re offered a program, ask for written confirmation of the terms before you agree. Make sure you understand exactly what’s expected of you and what happens if you miss a payment during the program.

What Creditors Might Ask

Creditors want to verify that you genuinely need help. They might ask about:

• Your current employment status
• Your monthly income
• Your monthly expenses
• The nature of your hardship
• Whether the situation is temporary or ongoing

Be prepared to answer honestly. You generally don’t need to provide documentation, but having a clear picture of your finances makes the conversation easier.

How It Affects Your Credit

This is an important question, and the answer varies:

• Some programs report your account as current during the program, which protects your credit.
• Others may report the account as “in a hardship program” or note modified payment terms, which can be seen by future lenders.
• If you were already behind before enrolling, the late payments that already happened will stay on your report.

Ask your creditor specifically how they’ll report your account during the program. Getting this clarity upfront helps you understand the full picture.

When a Hardship Program Makes Sense

A hardship program is a good option if:

• You’re experiencing a temporary financial setback
• You can make some payment, just not the full amount
• You want to avoid falling further behind or going to collections
• You’d rather work with your creditor than through a third-party company

When to Consider Other Options

A hardship program might not be enough if:

• Your financial situation isn’t temporary and you can’t see a path to recovery
• You have too many debts to negotiate individually
• You’re already months behind and the creditor won’t cooperate

In those cases, you might explore debt consolidation, a debt management plan through a nonprofit credit counselor, or — as a last resort — bankruptcy. But a hardship program is almost always worth trying first.

Bottom Line

Creditor hardship programs offer temporary relief — lower rates, reduced payments, and waived fees — when you’re going through a financial rough patch. They’re available from most major lenders, but you have to ask. Call your creditor, explain your situation, and ask what options they have. It’s a simple step that can prevent a temporary problem from becoming a long-term financial crisis.