hardship letter/hardship discharge

The 5 Most Common Hardship Scenarios to Use a Letter of Hardship

Few people get to go through life without worrying about money. At some point, nearly everyone has experienced some financial hardship, be it through job loss, medical bills, a natural disaster, or just bad luck.

When it happens, you have to decide who to pay first, who you can postpone, and how to feed your pets. You also want the hardship to have the least amount of impact on your credit rating. Most lenders and government bodies are willing to work with you if the worst happens, and the best strategy is to communicate clearly to them what has happened to you.

Using a letter of hardship is often the best way to communicate your situation to your bank, mortgage lender, or any other entity to whom you owe money. Although most creditors are willing to help their customers, they are picky about what constitutes a financial hardship. Let’s take a look at some scenarios in which a letter of hardship would apply:

Changes in Income or Expenditure

Have you had your pay cut or just had a baby? Maybe a roommate moved out without paying their share of the rent, or your car engine died? These unexpected changes can wreak havoc on your finances and cause real problems for you and anyone who depends on you.

If you’re like many Americans, you might not have enough savings to pull you through until your situation is corrected, so this may be a scenario in which to use a hardship letter.

Changes in Employment Status

One of the most demoralizing life events is the loss of employment. It can be a blow to your self-esteem as well as a shock to your bank account. If you’re lucky, you may receive a severance or referral to another company, but often it’s just you left wondering what’s going to happen to you.

You also may have had your work hours cut, or had your position downgraded. The result is the same: a seemingly permanent loss of desperately needed income.

Life Events

Sometimes a death in the family can cause terrible chaos if the deceased left significant debts or other financial responsibilities to their survivors. They may not have left enough money for funeral expenses.

Relationship breakdowns such as divorce or separation can lead to significant hardship for one or both parties since their living arrangements are likely to change. Moving to a single income from a combined income is most certainly a financial hardship.

Injury or Illness

These can cause unmatched upheaval in anyone’s life. Small injuries won’t significantly affect a person’s ability to make money, but more extensive injuries such as loss of limbs, car accidents, or head injuries could easily constitute a financial hardship.

The same goes for illness. Even people with the best genes in the world can get sick and incur hefty medical bills in a hurry. If you must pay for your care out of pocket, you’re going to have a bad time.

Natural Disaster or Emergency

It’s hard to say which of these occurrences is the worst, but when the world itself causes you harm, it feels disastrous and can raze your entire life. Depending on where you live, you could fall victim to earthquakes, hurricanes, tornadoes, and blizzards. Flood damage from these storms destroys homes, businesses, and roads.

Creditors are generally very understanding under these circumstances, but it is still a good idea to assume they won’t be and put together a letter of hardship.

What’s In a Hardship Letter?

Hardship letters are meant to request a particular favor from your creditor. You are asking for a deferment or new, temporary terms outside of your original agreement.

Hardship letters contain specific information about your circumstances, how they changed, how your creditor can help you, and how you are helping yourself out of your situation.

Here are some qualities of a good hardship letter to follow if you need to write one:

Be concise – Keep it to a single page. Don’t take up two paragraphs talking about the specifics of your family and pets. Use two or three sentences to explain what has happened to you, and leave room on the page for the rest of the information.

Be specific – Tell your creditor exactly how you’d like them to help you. Do you want to defer payments? Do you want to pay half for six months and lower your interest rate? If you give them a realistic baseline, they have something to work with to begin helping you.

Be detailed – Use dates and specifics. If you lost your job, tell them exactly when you started and ended. If you were discharged from the military, say the same and the reason for discharge. Bad things happen to good people; don’t be afraid to be honest with them.

Be realistic about the future – Let your creditor know if you think your situation is going to change, and if so, when it will. You can’t predict the future, but you can have an idea of how long your situation might last.

If You Need Help

If you are in a position where you need to write a hardship letter, you can get help quickly. There are different letters for different situations.

Sometimes the type of creditor will dictate what type of help they can offer you. For instance, a mortgage lender doesn’t want to foreclose, but likely can’t change your interest rate. A credit card company can change your interest rate and payments. Many companies give special treatment to military and first responders.

Take a look at our templates and see if you find a letter that suits your needs. They’re there to help you. Good luck!

hardship letter/hardship discharge

How to Write a Hardship Letter for a Military Hardship Discharge

By the end of 2018, the US Armed Forces consisted of 450,000 soldiers.

The majority of those men and women are bound to an eight-year contract. Unlike most other employers, that contract gives the army far more control over your working life – and your ability to leave.

One of the few ways you can get out of that contract early is to apply for a hardship discharge. Though the qualifying conditions are difficult to meet, proving that your family requires you more than the military can get you home to help.

Keep reading to learn how to apply and what needs to be included in your letter.

What is a Hardship Discharge?

If your family finds themselves in a situation in which you’re the only solution, a hardship discharge may be the answer. In these cases, you need to demonstrate that your family problem can only be resolved by your discharge.

Situations that qualify for a hardship discharge include having sick parents that are dependent on your assistance. It may involve a spouse or child(ren) that requires your care or a financial situation in the family that can only be rectified with your presence 

In these situations, the US armed forced allows members to apply for an early release. This type of discharge is based on genuine or undue hardship that meets the following conditions.

  • The situation is considered severe
  • The situation isn’t temporary
  • The situation has gotten worse as a result of your being in the military
  • The situation developed as a result of your being in the military
  • All other avenues for rectifying the situation have been explored and attempted prior to applying for a discharge
  • Your leaving the military is the only way in which to resolve the situation

When you apply for a hardship discharge, you may get granted separation from the army under an Honorable or General characterization. But it can also result in a transfer to the inactive reserves. In the case the hardship isn’t seen as permanent, you may be reassigned to a base closer to your home.

How to Write a Hardship Discharge Letter

To be sure, it’s not easy to get approval for a hardship discharge. The US Armed Forces have set strict standards for these types of discharges, and many service people find that they don’t qualify.

This is why your hardship discharge letter and application is so important. Take the time to carefully think through your claim and why it’s so important that you’re available for your family. You also need to ensure you meet all the basic criteria.

To increase the chances that your hardship discharge is approved, follow the guidelines below.

Basic Information

When your family is in dire need of your help, it’s easy to make the common mistakes of a hardship letter and forget the basic items you need to include on your application. These include the names, ages, and addresses of you and your family members. But you should also include the names, ages, and addresses of other immediate family members.

Keep in mind that if you’ve previously applied for emergency leave, hardship discharge, or humanitarian reassignment, you’ll have to include the dates of those requests. 

Most Important Information

After providing the most basic information required for your hardship discharge, you’ll have to start gathering the facts and reasons for your leave. The majority of your statement letter must include:

  • A description of the hardship, including the history of hardship when applicable. Includes names, dates, and places and be very specific in your description of the problem at hand.
  • A description of what you or your family has done thus far to try and rectify the situation.
  • A description of how your presence is going to improve or resolve the problem. Include what your immediate plans are.

Remember that approval of your request hinges on the decision of officials that don’t know you, your family, or the situation at hand. You should be as clear, factual, and specific as possible to increase your chance of approval. Don’t leave any detail out of the story. 

Supporting Statements

As part of your hardship letter, you’ll need to include supporting statements from your family members. You’ll need a statement from the family member(s) directly affected by your absence. But you’ll also need a statement from at least two people outside of your family.

First, have the person experiencing the hardship write a statement. In the case they’re unable to write the statement themselves, they can have someone write it on their behalf. This will serve as proof for your hardship claim. 

This statement includes much of the same information in your own letter. They should describe what the specific hardship is, why they can’t resolve it on their own, and why they can’t seek help from someone other than you.

Second, you’ll need at least two statements from people outside of your family who know and understand the situation. This might include neighbors, employers, or doctors.

Other Documents

Beyond your own statement, that of your family, and those from outside sources, you may also need to include other supporting documents. These include:

  • If part of your resolution is to seek employment to help your family, you should provide a letter from the prospective employer. The letter should be notarized and include information such as the type of employment, the salary, and your schedule.
  • If the hardship involves illness or disability, you should include a statement from any doctors involved in that person’s care. This statement should include dates, diagnosis, and prognosis.
  • If the reason for your leaving is related to a financial situation, you must provide an itemized budget.
  • In the case that death is related to your hardship, you must provide a copy of the death certificate.

The types of documents you need to provide are wholly dependent on your situation. But in most cases, the more proof you can provide, the better your chance of approval.

Ensuring You’re Successful

A military hardship discharge is a difficult discharge to qualify for. It involves a carefully considered letter and lots of supporting documentation. The armed forces are reluctant to let go of their soldiers before their contract is up, and it can be hard to convince them of your case.

But a carefully considered hardship discharge letter can make or break your case. For more resources on writing your letter and what you should include, consult our hardship letter blog for tips and advice.