Writing A Financial Hardship Letter

There are many situations in which you may need to know how to write a financial hardship letter. Hardship, by its definition, is an unexpected event. People usually do not take on financial commitments if they expect not to be able to meet them. It is the reality of life that your situation may change and this can lead to a temporary difficulty that prevents you from complying with your financial obligations.

What Is a Financial Hardship Letter?

Very simply put, this is a letter written to a creditor, in which special consideration is requested because of a certain situation. This means that you are struggling with your finances due to a situation beyond your control. Most commonly, these letters request that outstanding debts be consolidated, or that some leniency be shown in relation to certain deadlines for payments and other similar terms and conditions. For instance, you may require leniency in regards to the payment of your medical bills, credit card bills, or even your mortgage payments.

It is also reasonably common for students to write a letter of financial hardship. They may not be able to afford the tuition for the course they plan to enroll in, and they have not yet been able to secure a scholarship or grant. In these cases, they may request for a reduced tuition. They may also write a letter of financial hardship as part of their request for a grant or scholarship.

Specifics in Writing a Financial Hardship Letter

There are various kinds of financial hardship letters, depending on the type of creditor. That said, they all follow a certain format and have to include a number of specific things.

  1. You should always be completely honest and straightforward about your personal situation. It is not possible for creditors to get money from you if you haven’t got it, so it is in their favor to negotiate with you so that they can recover as much as possible. However, they will only consider this if you are open and upfront.
  2. Do not write an emotional letter. This isn’t about how you feel or about the difficulties that you are experiencing. You do not want to give them a sob story, but you want to give them a picture of the facts and the reality. They want to hear what the situation is, what you are asking for, and how you aim to resolve the situation.
  3. Always discuss how you aim to solve the problem and your time table, and demonstrate that you will be paying and will continue to pay, as much as you can. Do not write a financial hardship letter as an effort to get out of paying your bills. Rather, it is about being realistic about your situation and how you aim to improve it.
  4. If there is some special consideration that you want the creditor to make, such as asking an educational institution for a reduced tuition, then try to discuss things other than the reasons why you can’t pay the normal price. Make sure that you also tell them why they should consider you as an ideal student, and someone that is worth making a significant exception to the rule for.

Financial Hardship Letter Example

{Your Name}
{Your Address}
{Your Phone Number}

{Financial Institution Name}
{Phone Number}
ATTN: {contact person}


RE: {consolidation/restructuring/forgiveness} of debt on {mortgage, credit card or other loan payment}

To Whom It May Concern:

I am writing because I am currently experiencing financial hardship, and would like to find a way to {reduce my monthly payments, avoid foreclosure, etc.}.

My problems began {date}, when{reasons for financial hardship, such as death, divorce, medical issues, etc.; be specific}. Since then, I have had {amount in dollars} per month, which has to go to {other areas where you need to send your money each month}.

I am not trying to avoid my responsibilities, and I am embarrassed that I am even in this position in the first place. To begin this process, I can offer the solution of {a certain amount per month, a short sale, a reduction of what you owe, etc.}, with the hopes that you will find this suitable. I know that we all want to avoid {foreclosure, repossession, collections agency, etc.}, so please contact me as soon as possible and we can discuss the options.


{Sender Name}