No. of Recommendations: 3

You wrote, So I lost my job three days ago. I am told that if you can't pay your credit card debts, the first thing to do before declaring BK or visiting CCCS is contact the Credit Card Companies directly and ask for a reduced payment. Is this true that you can do this? If so, what do I tell them?

A credit card company probably isn't going to do anything for a hardship until you're actually late with them - they lack any incentive if you're already in good standing. Of course it won't hurt to simply call and ask them to lower the rate ... or if there's a "payment holiday" in the near future.

While it's a good idea to contact the credit card company to let them know what's going on when you're in trouble. I wouldn't actually do it until you're at the point where a payment is due and it's very unlikely you'll be able to make it.

In practice notifying the credit card company too early can hurt you. They're likely to annotate your report saying you're a high risk and they may even start jacking up your rates before you've done anything to deserve it.

Instead I'd focus on getting another job and applying for unemployment. In the interim, you may want to look for ways to scrounge up extra cash. Perhaps apply at a temp place. Or get a job flipping burgers or answering phones somewhere. You might also consider consider selling stuff you don't need.

If your credit and credit lines permit, you may be able to borrow money from your creditors in order to cover those minimum payments - it all depends on what condition your finances are in. Perhaps if you can find the time, you can post a budget and a list of assets and liabilities and maybe we can suggest some ideas for filling in the gap.

- Joel
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