What is a hardship plan?

A hardship plan is a payment arrangement that helps individuals who are struggling to pay off their debt. Specifically, a hardship plan is a way to reduce monthly payments so that debtors can get back on track financially. In California, the Consumer Debt Defense Law provides additional protection for individuals struggling with debt. This law allows debtors to create a hardship plan and enter into special payment arrangements with their creditors. Through these arrangements, debtors can negotiate to reduce their monthly payments or even suspend them for a period of time. During this period, debtors are still responsible for making payments, but the payments are reduced. They also have the option of receiving additional services and support from a debt counselor. The goal of the hardship plan is to help the debtor get back on track, not just to reduce payments. In most cases, debtors must first prove that they are unable to keep up with their payment obligations. They must also show that they have the income and resources available to pay off the debt over time. If the court accepts their hardship plan, it will remain in place until the debt is paid off. There are certain protections in place with a hardship plan. For instance, creditors cannot take any legal action against debtors while the plan is in effect. Creditors are also not allowed to contact debtors during this period. Overall, a hardship plan is a payment arrangement that helps individuals who are struggling with debt. Through this plan, debtors can reduce their payments and receive additional services in order to eventually pay off their debt. In California, the Consumer Debt Defense Law provides additional safeguards for debtors who enter into such a plan.

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What is a hardship plan?

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