Ask The Experts: Help with a Loan Modification

Q. I have good credit but due to the recession my company cut some hours which is hurting to make ends meet. I've contacted my mortgage company to see if they will assist me in a loan modification but most of all the credit card balance keeps going up and up. Do you have any suggestions in what ways I can target the principle besides doing a transfer to another credit card?

Secondly, I am getting offers from laywers to do the loan modification but their fees run up to $5K per process. Do you suggest for me doing it myself or asking my banker to assist me on this matter? Thank you. -Rafael

A. I'd stop whatever you're doing right now and call Consumer Credit Counseling Service. You can find a local office at their website. They can help with the credit card debt. Using their services will not hurt your credit scores.

Regarding the loan modification process, I'd suggest calling your mortgage lender and asking them how they would prefer you to proceed. "Do I need to hire an attorney to perform a loan modification or is this something we can do ourselves?" Loan mods aren't new but they're so uncommon, until now, that there isn't a standard process in place.

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John Ulzheimer is a nationally recognized credit expert, president of Consumer Education for and contributor to On The Money. Learn more about him at