Definition
A hardship consideration is a temporary agreement by a creditor to reduce interest and/or waive fees to help the account holder recover from a life event.
Analysis
A serious event, such as a medical emergency or an interuption in income can make debt repayment difficult. Some creditors may authorize a temporary reduction in interest rates and may even re-age an account to restore on-time payment status as a part of their hardship agreement. Such an agreement normally does not exceed 6 months, so alternative options may be necessary to resolve more long-term difficulties.
Creditor participation in hardship cases varies widely. That is why it rarely is a good option for debtors that owe multiple creditors, since it is unlikely that all or even most would agree to granting better terms through a hardship.
