The right way to Write a Hardship Letter



Nearly everybody hits a tough patch financially in some unspecified time in the future of their lives. Whether or not it’s an surprising medical expense or any unexpected occasion, cautious planning doesn’t make you immune from monetary crises.  

Monetary empowerment means understanding your choices and do your greatest in a given state of affairs. 

Writing a hardship letter to a creditor just isn’t a activity anybody needs to do, but it surely’s a vital device when you’re attempting to navigate a private monetary disaster.  

A hardship letter is your likelihood to clarify your monetary difficulties to a creditor and make a suitable association for each events.

What constitutes a hardship?

A monetary hardship is one thing exterior your management that adversely impacts your funds and talent to satisfy your monetary obligations. Examples of hardship occasions embrace:

  • Employment standing change (layoff, furlough, discount in pay, switch) 
  • Army deployment 
  • Divorce or separation 
  • Loss of life in fast household 
  • Pure catastrophe 
  • Extreme sickness, harm, or incapacity 
  • Incarceration 

Typically, most collectors solely take into account an occasion to be a monetary hardship if it’s a circumstance past your management. Most collectors gained’t take into account occasions like the next as proof of true monetary hardship or causes to offer reduction.

  • Loss in property worth or house fairness  
  • Curiosity-rate will increase on present loans or financing 
  • Willful non-essential spending 
  • Revenue disruptions that may be managed by way of liquid property 

What may you achieve from writing a hardship letter?

There are a number of issues banks and collectors might do in response to a hardship letter, and understanding what you may have the ability to achieve is necessary.

You may ask for particular lodging, though it’s as much as the creditor whether or not they want to permit them. Actions the lender can take embrace:  

  • Suspending your funds for a time period
  • Eradicating past-due standing to guard your credit score
  • Altering your minimal cost quantity
  • Adjusting your rate of interest
  • Providing a settlement
  • Permitting you to short-sale your house
  • Modifying different mortgage phrases

What ought to go in a hardship letter?

When writing a hardship letter, it’s necessary, to be sincere, concise, and clear. Current your case in a simple method and clarify what occurred dispassionately with out casting blame. Present an motion plan for the creditor with proposed options that can assist you get again in your ft and assist them receives a commission.  

You may also embrace paperwork that assist your place. Paperwork you could want to ship alongside along with your letter embrace:

  • 1099s, W-2s, paycheck stubs, and up to date tax returns: These can assist confirm your present earnings from each conventional work and aspect gigs. 
  • Financial institution and funding account statements: To assist confirm your present liquid property.  
  • Proof of economic hardship occasion: Employment termination letters, medical payments, accident or police studies, restore payments, army orders, or incapacity declare are all paperwork to ship, relying in your specific hardship occasion.  

Instance of a hardship letter

September 9, 2022 

Re: Account # 867-53-09 

To whom it could concern, 

My title is John Doe, and I’ve been an account holder along with your establishment for eleven years. I’m writing to request monetary hardship help with my bank card account. This letter provides you an outline of my monetary hardship and the help I’m requesting out of your group. I’m additionally enclosing related documentation to assist my request.  

5 months in the past, I used to be laid off from the managerial place I’ve held for a few years at my former employer, Acme Customized Widgets and Propane Equipment. Whereas I’ve been in a position to keep present on my funds till now with the help of unemployment funds, these funds are coming to an finish, and I’ve not been in a position to safe full-time employment. I’m at present driving for Uber and Lyft to get by, however I’ve been suggested that my car requires new tires and brakes to drive safely, and I can’t fairly afford to take action and feed my youngsters whereas nonetheless sustaining my funds as scheduled. 

We’re approaching what’s historically the hiring season for professionals within the customized widget business and I’ve a number of promising leads, however my household and I must get by way of the following couple months first. I’d prefer to protect my good credit score file, so I’m writing to ask that your group take into account suspending or decreasing my funds for the following two-three months so I can get again on my ft with out having to decide on between staying present or feeding my household. I’m assured that three months from now, I’ll be on a way more regular monetary footing and in a position to resume my regular funds.  

I’m enclosing my present financial institution statements, my earnings from Uber and Lyft, my unemployment cost paperwork, my letter of severance from Acme, and my tax returns for the final two years to exhibit my prior and present earnings and state of affairs. You may attain me at (770) 555-5555 or [email protected] with any questions or requests for documentation or clarification. Thanks a lot on your consideration! 


John Doe 

Hardship letter templates

Writing a hardship letter may be difficult, but when our instance doesn’t encourage you, there are many different choices! Try TemplateLAB’s checklist of over 30 hardship letter templates to seek out one that matches your wants. 

Shifting on from monetary hardship

When you’ve gotten by way of your monetary hardship, it’s time to take inventory of your monetary state of affairs, each with the loans and accounts that labored with you to ease your hardship and those who didn’t. Doing what’s greatest on your monetary well being is the epitome of economic empowerment! 

When issues are going extra easily for you, that’s a good time to consider managing your debt. Take into account getting a private mortgage by way of Prosper or Dwelling Fairness Line of Credit score (HELOC) to consolidate your debt, scale back the variety of funds you make every month, and streamline your funds.  

We hope you by no means have to jot down a monetary hardship letter, but it surely’s necessary to maintain it in your toolbox in case you ever want it!

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