Monday, Nov. 02, 2009

Wait - Job loss deals come with lots of fine print

Promotions known as "job loss protection plans" no doubt provide a valuable safety net for those who would buy anyway. But if you're on the fence because money is tight, it's worth taking a closer look at the fine print. All these plans require you to submit an application and in most cases proof that you were laid off.

CITIGROUP MORTGAGES

Expires: No date set.

How it works: Citigroup will lower mortgage payments for unemployed homeowners to an average of $500 a month for three months or longer, depending on your circumstances. The loan is considered in good standing, and is not reported as delinquent.

The fine print: If your spouse is also listed on the mortgage, you both need to be unemployed and at least one of you needs to have been laid off in the past year. If one of you works, the annual income can't be more than $10,000. Your mortgage also needs to be 60 days or more past due or in foreclosure, but that term may soon be loosened.

DISCOVER CDS

Expires: Dec. 31

How it works: Those who open or renew 12-month CDs won't be charged penalties if they lose their job within one year and need to make an early withdrawal. The remainder of the balance continues accruing interest. Enrollment is automatic for CDs opened or renewed after July 1.

The fine print: There aren't many catches. But you must be employed full time when you open or renew the CD, and for 30 days thereafter. You also need a minimum balance of $2,500 in the CD.

HYUNDAI CARS

Expires: Dec. 31

How it works: You can return your car for up to one year after the purchase. If the value of the loan exceeds the value of the car, you're not responsible for up to a $7,500 difference. If you want to keep the car, Hyundai covers up to three months of payments, regardless of the cost. Your credit report is not affected.

The fine print: You're not eligible if you get a temp job or part-time work. You also need to have already made the first two payments. You must be employed for 90 days before filing your claim.

VIRGIN CELL PHONE BILLS

Expires: Dec. 31

How it works: Payments on monthly cell phone plans will be covered for up to three months. You can apply for the benefit for up to one year after you enroll. New customers are automatically enrolled, and existing customers can sign up.

The fine print: The company will cover a maximum of $90 a month, so you'll need to pay the difference if your bill is higher. If you have more than one account, you can only submit a claim for one. You have to have made two monthly payments to be eligible.

WHAT TO KNOW

- Unemployment alone may not be an automatic qualifier; there could be numerous factors you need to meet to be eligible.

- Even limited part-time work might disqualify you for the program. This could be a problem for anyone who is looking to make ends meet after being laid off.

- The payment method you choose - and the person who makes the purchase - could determine whether you qualify.

- Ask about any limits on reimbursement. If your purchase is expensive, you might not get the entire amount covered.

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