What is a hardship plan?

A hardship plan is an agreement between a borrower and a lender regarding a loan that is struggling to be repaid. In this plan, the lender agrees to change certain aspects of the loan such as the interest rate, the amount of the monthly payments, or the length of the loan in order to make it more manageable for the borrower. These changes make the loan easier to repay for those with limited financial resources. In Rhode Island, Consumer Debt Defense Law requires lenders to work out a hardship plan with borrowers when they are unable to make payments on a loan or credit card. This law helps to ensure that borrowers are not unfairly burdened by debt that they are unable to repay. The lender is not required to accept a hardship plan, however, and may choose to pursue legal action against the borrower if necessary. The hardship plan is an important element of Consumer Debt Defense Law in Rhode Island and provides borrowers with an option to get back on track with loan payments.

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What is a hardship plan?

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