hardship letter/hardship discharge

The 7 Elements of a Persuasive Hardship Letter

Every day, American’s fall further and further behind financially. You’re doing the best you can, but suffering through a financial hardship really takes a toll.

On top of that stress, you’ve now been told that you need to write a financial hardship letter to get the help you need. It’s probably something you’ve never had to do, until now.

So, what is a financial hardship letter and how do you write one?

Well, it’s a letter that explains in detail the hardship you are experiencing. It helps people understand your difficult situation and how they can best help you. That’s why you need to make it very persuasive.

Here are the most important elements you should include in your hardship letter.

7 Elements of a Persuasive Hardship Letter

1. Make it Personal

This isn’t a business letter. You want the person reading it to identify you as a person, a human being in need. Write your financial hardship letter in your own words, using conversational language.

Be sure to keep it polite. You’re asking for help, after all.

2. Use Dates

You’re going to tell a story in this letter. Use dates to help explain how long it took to get in your current situation.

Make an outline using dates of significant events. Close estimates using month and year are fine. You may need to look back at old statements and documents to figure it out.

Using dates helps keep your story of events in logical order. It also helps the reader understand how long you’ve been trying to fix the problem on your own.

3. Include Specifics

Hardship letters need good examples. You want to include specific things that have happened to put you in this situation. Be direct. Do not exaggerate.

Give examples of the tough things you’ve endured. If you’ve lost your job, say so. Did you become a single parent? Tell the reader how that happened.

Include specific financial data. Numbers tell a financial story that your reader will understand. Here are some examples of financial information that may be persuasive:

  • Mortgage balances, rates, and terms

  • Specific credit card balances and rates

  • Your budget shortfall

  • Tuition, fees and other amounts related to schooling

  • Childcare and other expenses related to raising a family

  • Care and financial support you provide for an aging parent
  • Medical bill balances and prescription fees

The more information you give, the better your reader can understand what you are going through.

4. List Everything You’ve Done to Help Yourself

Most people want to help someone who also helps themselves. Show how you’ve taken responsibility for your situation. Your reader will be more empathetic if they can see you’ve done your best.

Here are a few examples of things that may help:

  • Tried to find employment or a second job

  • Borrowed money from family or friends

  • Built a budget

  • Sent partial payments

  • Worked overtime

List examples that show how you hard you are working on it. This can go a long way in persuading someone in your favor.

5. Explain that You are Trying to Avoid Bankruptcy

The mere mention of filing bankruptcy changes the situation. In a bankruptcy, all credit, collections, and foreclosures are frozen. No bank wants this to happen.

Banks and creditors have a lot more to lose when someone files bankruptcy, so they work much harder to avoid it. In many cases, they will offer new options to help you avoid filing bankruptcy.

Don’t threaten with a bankruptcy. Explain how you are trying to avoid one.

Bankruptcy is the last thing that most people consider. You only do this after all other options have been exhausted. Mention in your letter that, if things continue on this current path, a bankruptcy may be your only option.

Reassure your reader that it’s not the outcome you want. You are trying to avoid bankruptcy, after all. You just need a little help.

6. Ask For What You Need

This is where you ask for help. Explain what you need from this organization. Be as specific as you can.

Make sure you have done your research and have a plan of action. Understand exactly what the organization has to offer and if it will help stabilize your finances. You don’t want to be back in this situation 6 months from now.

  • If you are looking for a loan modification, list out specifically what you are looking for. Want a rate reduction or a change in the loan terms? Say so.

  • Looking for a grace period? Detail the time frame you need. Be specific.

  • Need financial assistance? Ask for the exact amount you need. If you ask for too little, you won’t be in a better place in the long run.

The more specific you can be, the better. Offers that won’t help you, in the long run, are useless. Ask for exactly what you need.

7. Explain How it Will Help

Your hardship letter should explain how your request will help your situation.

The goal is to stabilize your finances. Tell the reader how this will happen if they grant your request:

  • Are you trying to keep your home or sell it in a short sale? Explain how this will help your family live better.

  • Maybe your goal is to consolidate debt. Explain how a single, lower payment would help you pay your bills each month.

  • Trying to get financial assistance? Explain what you will do with the money to help stabilize your finances.

  • Proposing a debt settlement? Show how you will be able to get back on track if you can reduce the amount you owe.

Whatever the request, be sure that you let the organization know how it will help you become stable.

It’s Time to Write

Now that you know how to write hardship letters, it’s time to sit down and do it. Don’t put it off because it’s difficult. Get your hardship letter done and get the help you need.

Looking for more help with writing hardship letters? Check out our samples and advice!