Asking Creditors for Deferment

A deferment is a temporary suspension of the repayment of a debt. Most creditors will not offer a deferment unless a debtor’s circumstances prevent him from making payments for a temporary period of time. A debtor, therefore, may need to provide documentation of his circumstances or may need to attest to the truthfulness of the request.

Credit Cards

Credit card companies do not normally provide a deferment as an option. Instead, a debtor who is experiencing a financial hardship, such as unemployment or a decrease in income, may ask the creditor to agree to reduce payment amount. Many credit card companies offer hardship programs that result in a reduced interest rate and a reduced payment. This may be a short-term plan for one year or less or a long-term arrangement that results in the payoff of the debt within a specific number of years.

Mortgage

A mortgage lender may offer a borrower a deferment, or forbearance. If granted a forbearance, the lender will suspend the borrower’s payments or may allow the borrower to pay a portion of the regular monthly payment. This is a temporary solution to a borrower’s inability to pay. Most often, this is granted in short-term situations, such as loss of income because of a medical problem or a natural disaster. Fannie Mae, however, allows servicers to suspend or lower an unemployed borrower’s payment for a specific amount of time.

Student Loans

A student loan deferment suspends payments for a specific amount of time. A lender determines the conditions of the deferment, which may include unemployment, disability, returning to college or enlistment in the military. In some situations, the loan will not accumulate interest while it is in deferment. If a borrower does not qualify for a deferment, he may qualify for a forbearance, which is similar to a deferment but interest will continue to accumulate regardless of whether the loan is subsidized or unsubsidized.

Renegotiation

If you do not qualify for a deferment, it may be possible to renegotiate the loan or debt. If the debt is a car loan, the lender may agree to refinance the loan for a new term with a lower interest rate. If you are having trouble paying a credit card, ask the creditor to lower the interest rate, so that the payment is reduced. A student loan lender may agree to renegotiate the terms of the loan by offering an extended repayment plan with a longer payment term, a graduated payment plan that starts low and increases each year or an income sensitive repayment plan which is based on the debtor’s income.

About the Author

Jessica McElrath has been a freelance writer since 2000. McElrath is the author of "The Everything John F. Kennedy Book" and "The Everything Martin Luther King Jr. Book." McElrath has a Bachelor of Arts in history from the University of California at Berkeley and a Juris Doctor from Santa Clara University School of Law.