Credit Card Hardship: How to Ask For Help

Americans hold at least $6,000 in credit card debt on average. And while credit card debt is considered “unsecured” debt, it can wreak havoc on your credit report if you miss a payment.

Whether you’ve lost a job or are just trying to make ends meet, there is a light at the end of the tunnel.

If you’re struggling to repay your credit cards, you could qualify for a credit card hardship program. Read on to learn more about this program and how it might be able to help you.

What is the Credit Card Hardship Program?

Depending on the issuer, your credit card company may offer a special program to help you during times of need. This program is designed to help temporarily reduce your monthly payment amount until you can get back on track.

In most cases, the program will last for a minimum of six months to a maximum of one year. During that time, you’ll still need to make your payments on time, but the required amount will be lower.

You may even be able to waive certain fees like late fees and over-charge limit fees depending on the company. The goal is simple: you get a break, and your card issuer still gets paid.

In order to enroll in this program, there are certain guidelines you’ll need to follow, but it’s a wonderful way to reduce your stress while salvaging your credit score.

Examples of Hardship

When it comes to financing and debt, there’s a myriad of reasons you could be falling behind. The most common reason is job loss. When you lose your income, of course, you’re going to lose the ability to pay certain bills.

Another example of hardship may include a serious illness or an injury. During those times, you may not be able to work, and you’re likely accruing some large medical bills, too.

A death in the family and even a divorce are also common forms of financial hardship. When you lose someone, you are not only struggling emotionally but likely financially.

Finally, another common cause of financial hardship is coping with a natural disaster. If you’re a victim of a storm, flood, or fire, you are probably struggling to maintain your financial obligations.

What to do Before You Enroll

A credit card hardship program can be helpful, but it may also impact your finances negatively in other ways. Before you decide to enroll, sit down and create a budget.

Take a close look at areas where you might be able to cut back such as your cable bill or your cell phone data plan. By shaving off a few dollars here and there, you might be able to make up for it and pay your card’s monthly minimum without a problem.

If you’ve become ill or injured, consider supplemental insurance that can pay you for time lost at work. Really think about the timeline of your financial hardship and how long you think it will last. This will help you when you call to enroll, as most issuers want to know how long to expect lower payments.

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When You Call

It’s important to note that most customer service reps may not be familiar with their company’s hardship program. When you call, simply ask if they offer one and if you could get some more information.

Some credit card companies will worry as soon as you mention your inability to make payments. Never tell them that you’re “unable to pay,” but instead just ask about the terms and guidelines of the plan.

It could take some time for you to decide whether the plan is worth it, so getting the fine print in your hands is the best way to start. After you’ve read all the documentation, you can submit a hardship letter.

Make sure you clearly and thoroughly explain your situation along with a timeline of how long you’ll need to be enrolled. Make sure you tell them exactly what amount you can reasonably pay each month. This number is key to ensuring you get a fair deal.

Understanding Terms

Once you’ve determined your desired payment and timeline, it’s time to submit your information to the credit card company. Keep in mind that not all issuers will accept your initial request.

Depending on the number, the credit card company may determine that your desired payment is too low. In this case, they’ll either submit a counteroffer with a new payment amount or decline your application.

Always emphasize your willingness and desire to repay your debt. Tell the credit card company you will stick to the timeline and once it’s over, you’ll be able to go back to your normal monthly minimum.

You should also find out if participating in this program will hurt your credit or not. Some companies may allow forgiveness and it won’t impact your score. On the other hand, they may require you to close the account altogether.

If you are forced to close your account, you’ll still need to make the payments or you run the risk of a “ding” on your credit report. If you have to close an account, it will hurt your credit, but it’s still better than being hit for nonpayment and collections.

There is Hope with Hardship Programs

Although it may not seem ideal, a credit card hardship plan can be extremely helpful in times of need. Do your homework and try to find ways you can cut your expenses to save money. As a last resort, these programs can help you maintain your good credit in the short-term.

For more information about writing a hardship letter, be sure to visit our website. 

sample coronavirus letter Header

Sample Coronavirus Hardship Letter

COVID-19 has had an impact on every person’s life. Tragically, many people have lost their lives to the virus. Countless others face the loss of their loved ones, homes, jobs, retirement accounts, and more. For people with upcoming deadlines, it may be a good idea to write a coronavirus hardship letter to ask for an extension.

Thankfully, some companies extended their payment deadlines automatically. Others expect to do the same for customers who request it. Keep reading to learn more about how to write a hardship letter. We’ve also included a sample coronavirus hardship letter below.

Components of a Coronavirus Hardship Letter

The definition of a hardship is malleable according to the institution you’re writing too. However, most institutions understand the widespread effects of the coronavirus. This generally makes it easier to get the message across to the institution you’re writing to.

In fact, the people who read the letter on behalf of the institution are going through the same hardship. The coronavirus hardship letter is unique for this reason. But it still calls for other important factors.

  • First Paragraph

The first paragraph should be short and concise. For example, if you’re requesting a deadline for the next payment due on a loan, state that in two to four sentences. There will be plenty of opportunity to explain yourself more later.

  • Next Two to Four Paragraphs

Now’s the time to explain how the coronavirus has affected your ability to pay the bill or payment on time. Explain the details and include documentation that supports the details you discuss.

In other words, if your employer laid you off, detail the circumstances in your letter. Explain that because of the “Stay at Home” order made by California governor, Gavin Newsom, you’re unable to work.

Although the rest of the story may seem obvious, take the time to spell it out. Include your last pay stub or an unemployment insurance paystub.

Share that you’ve explored other options to avoid making a payment late. Feel free to share what those options were and why they won’t work. It wouldn’t hurt to include that you’re committed to making your payments as agreed, and that the situation is out of your control.

  • Other Items to Include

Finally, be sure to include basic contact information like your name, address, phone number and email address. Also, include your account number and if possible, another piece of identifying information. This can include your birth date or social security number, depending on the agency you’re writing to.

Be Honest and Humble

Although it seems like writing a coronavirus hardship letter is quite humbling, many hardship letters don’t read that way. It can feel natural to blame your employer for laying you off or your bank for charging too much interest. Maybe you can blame your spouse’s employer or the governor of California for making the “stay at home” order, too.

You may be putting all the blame in the right places, but it rubs people the wrong way. After all, the people making the decision on your hardship letter are only people. For that reason, it’s also important to be honest.

An unrealistic story is also likely to rub people the wrong way. There’s no need to exaggerate circumstances around the hardship. That especially applies to hardships centered around coronavirus.

Other Tips for a Coronavirus Hardship Letter

The overall message of a hardship letter needs to be, “There’s no other way.” Institutions don’t want to have to grant hardship letter requests. They want to be your first priority.

But they also understand that life isn’t perfect, nor is it always easy. For that reason, it’s important to paint the picture that there’s no other way to get through this difficult time. As we mentioned above, a coronavirus hardship letter is unique in that way.

That’s because the adversity of coronavirus hardly needs to be explained to anyone. However, you still need to include it in your letter.

Furthermore, exclude information that shines an objectively negative light on you. The institution you’re writing to may decide that you don’t particularly need the help. That is if you spent all your money gambling or couldn’t make any money because you were in jail.

Also, avoid sharing other alternatives for getting the money. For example, don’t mention that your rich father-in-law will give you the money if the letter you’re writing is ineffective. Your institution will likely deny your request and expect you to borrow it from your rich father-in-law instead.

How to Write a Sample Coronavirus Hardship Letter

We’ll include a sample coronavirus hardship letter below. While we encourage you to consider all the points above, write an original letter. Letters from templates or that don’t clearly correspond with your situation will be a turn-off.

Institutions don’t expect you to have a degree from Harvard in writing hardship letters, but it’s good to use basic reading and writing skills. In other words, proofread, spell check, and proofread your letter again.

Coronavirus Hardship Letter Example:



[Name of Bank Contact] [Bank Contact’s Job Title] [Bank Name] [Bank Street Address] [Bank City, State, Zip]


Re:      [Your Name] [Your Address] [Your City, State, Zip] [Your Contact Phone Number] [Your Account Number]


Dear Mr./Mrs. Bank Contact:

I’m writing this letter to ask for a payment [extension/deferment/etc.]. My employer had to lay off everyone in my position because of the coronavirus. A [one/two/three]-month [extension/deferment/etc.] will be enough for me to overcome this hardship and get back onto a regular payment schedule.

As a [job title] at [company name], I’m not an essential worker and therefore, my employer laid me off temporarily. I’m scheduled to return to work after the state governor lifts the “Stay at Home” order.

I tried to get a short-term personal loan, as well as looked for supplemental work among other efforts to earn money. But they haven’t been fruitful. As a last resort, I’m hopeful that you’ll [extend/defer] by next [one/two/three] payments.

I look forward to your prompt response.


[Sign Here in Ink] [Print Your Name] [Your Email Address]


Treatment Center Hardship Letter

Treatment Center Hardship Letter

Have you given up on the idea of ever attending a substance abuse treatment center because of the overwhelming cost? You’re not alone, but there is one secret that most people aren’t aware of. That secret is called a treatment center hardship letter. A hardship letter is one that’s written to the addiction center(s) you select. It asks for help in covering the costs associated with your treatment. Each treatment facility’s funds are limited to what they can provide, either out of their pocket or from state or federal grants.

The granting of hardship letter funds doesn’t guarantee you will receive inpatient or outpatient treatment, nor does it promise completely free treatment. Many times, it only covers a partial payment of your out-of-pocket costs after your insurance is billed. If you don’t have insurance, try sending a hardship letter to request a full or partial scholarship to the facility. It’s also worth noting that facilities don’t extend scholarships or discounts to offset your income if you must miss work. Nor will they help with your monthly household bills. You must come up with a plan to have those bill met while you’re in treatment or consider other options. The good news is that any financial help can get you one step closer to getting help for your addiction!

We’re going to discuss when and how you should write a hardship letter to an addiction treatment center. That is, if you feel it’s the best way forward based on your financial circumstances. We will also give you a template that you may use for this very purpose. Keep reading to find out everything you need to know about overcoming any financial cost barriers to treating your addiction!

Why You Might Consider Writing a Treatment Center Hardship Letter

It may seem as though everyone should write a hardship letter to receive discounted or free treatment. However, some specific circumstances receive more positive results than others. These circumstances include, but aren’t limited to when the patient is homeless, has no family to turn to, or if there are children involved.

Additionally, young adults without health insurance may be eligible for reduced rates if their letter conveys a strong desire to get clean or sober. Just remember, it’s important that you’re honest and forthright because you probably only have one chance per treatment center for this letter to work!

Information Your Treatment Center Hardship Letter Should Contain

One of the hardest parts of writing a hardship letter will be setting your pride aside. You will have to be honest about your financial situation, as well as how you’ve gotten there. Not only will you need to talk about your finances, but you’ll also need to discuss your addiction, the negative effects it has on your life, and why you’re ready for help. This does not necessarily mean telling a sob story or trying to make the reader feel bad for you. It’s simply to inform the treatment center of the reasons why you believe you’re eligible for financial help.

What you are trying to do is convey that you’re willing and able to accept some difficult truths about yourself and your addiction. You may want to talk about some of your future goals after treatment, especially if it includes your children. Ultimately, if you you’re not truly ready to get clean and sober, the reader of your letter will likely sense this. You must be ready for a change and commit to doing whatever is necessary. This often means facing loved ones, confronting old hurts and mistakes, and being willing to take suggestions. Some of the best pieces of information to include in your letter are:

  • Your current living situation
  • Drug(s) of choice and how much you’re using
  • Whether or not you have children who are reliant on you as a parent
  • Any possible insurance coverage
  • Potential payments that you can afford
  • Why you need to get clean

Show the treatment team that you’re willing to do whatever is necessary to change your life and get clean!

Don’t Ask for a (Completely) Free Ride

While you may not have all the money you need to pay for your treatment, there are other ways that you might consider “paying.” You may wish to include in your hardship letter that you would like to work out a financial payment plan. This payment plan would be an amount you can afford monthly or weekly beginning during or after you graduate treatment.

Making this offer in your letter shows that you aren’t just looking for an “easy” financial out. Instead, you understand the gravity of your situation. Instead of repaying the treatment center financially, you may also ask if there is work that you can do. They may need help maintaining the grounds or the inside of the treatment center while you’re there. You can also promise to lend a hand upon the completion of your program.

Getting the Answer You Want

Writing a hardship letter doesn’t necessarily mean that you’ll receive a full scholarship to a treatment center. You may have to send your letter to several facilities to obtain even one “yes.” One of the hardest parts about knowing who to send your letter to will be finding an addiction treatment center that will consider it.

While there are thousands of treatment centers in the United States, not all of them follow the same hardship help protocols. After you send your letter, you will need to follow up. In fact, for the best probability of positive results, you will need to be persistent. This will also demonstrate to the facility that you’re serious about recovery and are ready to pursue it!

Honesty, Openness, and Willingness

If you’ve been through treatment before, you’ve heard the phrase “honesty, openness, and willingness.” If you’ve never attended a treatment program or participated in support meetings, it is probably new to you. Either way, the first letter of these three words spell out HOW. Each word is practical when it comes to getting and staying clean or sober. You should apply this mantra when writing your hardship letter.

Demonstrate honesty about your addiction and the need for help. You must be open about where your life is and how it got there. Finally, you need to be willing to do whatever it takes to get sober, including owning up to your previous mistakes and confronting your past. If you need further direction, check out the sample treatment center hardship letter below, courtesy of Real Hope Recovery.

How Can a Hardship Letter Help You?

When you get into debt, it can seem insurmountable. Bills keep coming in and if the money isn't there to pay them, it can get harder and harder to keep on top of the problem. It can be overwhelming, particularly if you have no feasible way to solve it. Financial hardship is stressful and it affects a huge number of the American population.

Debt can start relatively early in life. Student loan debt currently stands at around $1.4 trillion and consumer debt is steadily increasing every quarter. The thing is, borrowing helps keep the economy buoyant – people buying cars, homes, sending their children to school and college. Where it becomes bad, for everyone, is when those debts aren't being repaid.

What Can You Do?

So, what can you do when you don't have money to pay off your big debts and you can't see a way out of the problem, short of winning the lottery? There are things you can do to find your way out of the mess. It's all about keeping your head straight and considering the options that are available to you. One of these is writing a hardship letter.

A Hardship Letter? What's That?

A hardship letter is a document that you compose to your lender to plead for leniency with your loan. They are most commonly used when a person is defaulting on their home loan and wants to avoid foreclosure, but can be used in other cases, such as for your credit card repayments. The purpose of the letter is to more thoroughly explain your situation to your lender and hopefully to convince them to allow you more time to come to terms with your debt and propose a solution for you to resume your monthly repayments.

When Should You Consider Writing A Hardship Letter?

There are several situations where you could use a hardship letter. The following are times that you will most likely find that a lender could be sympathetic to your cause and be most likely to consider a solution from you:

  1. If you lose your job – sometimes, losing your job can come completely out of the blue and many Americans don't have the savings to tide them over until a new opportunity comes along. Most lenders comprehend that it can take time to find a new job, so may be more understanding about the time it could take to pay your debt.
  2. A death in your family – if your spouse or the main bill payer in the household dies suddenly, it can be a huge shock, not just emotionally but also financially. The person or people left behind may struggle to get their head around what needs to be paid and when. If you've fallen behind with payments or have taken a financial hit because the deceased person is no longer contributing, then your lender is likely to be more accommodating.
  3. Natural disasters – if you have been a victim of a catastrophic event of nature that causes damage to your home or affects your financial situation in any way, then it would be a very tough lender indeed who wouldn't give you a break in this situation.
  4. Medical emergencies – if you, your partner or someone else in your family has an illness or medical emergency that incurs a lot of extra financial payments then this is definitely a solid reason to compel your lender to give you a break with your payments.

Remember that for any of these situations, you will need to prove what is going on with back-up evidence and supporting documentation. Pretending that any one of these is happening will not be looked on favorably if and when it is discovered you have made it all up.

The Layout of Your Hardship Letter

Before you write your letter, sit down and think about what you want to say and how you want to say it. There is no point dashing off something short about how you can't pay your bills and you want an extension. It's also not a good idea to write pages and pages about how the situation has come to this, as that letter will be binned. Keep it short and sweet, but cover all the important points.

You should:

  • Write it in simple terms. Don't be flowery in your descriptions, be basic. They want to know what happened, not a novel on the destitution of America.
  • Be specific. Use dates and statistics. Use actual numbers. Be detailed in these specifics – i.e. you are now earning 43% less per year due to your job change, your home has been valued at $124,000 less than it was three years ago.
  • Include your name, address, phone number, date of the request, loan amount and loan reference number.
  • Paint the worst possible picture. If your child has developed a recurring ear infection and your sister-in-law has moved in while she gets back on her feet, include this. If it is pertinent to the costs of your household, it should be in the letter.
  • Be careful not to come across as angry or too emotional. Don't bargain. Don't be political or make any political references – no matter how you feel, this is not relevant to your particular scenario right now.
  • Explain the methods you have used or what you have tried to do to alleviate your financial burden, for example, downgrading to a less expensive car, selling old toys etc.
  • Tell them what you want. Here you can offer solutions, tell them how you plan to get back on your feet and how you are committed to paying off this loan.

How A Hardship Letter Can Help

If your request is successful, your hardship letter could be the first step out of the financial despair that you are in. Your lender will be open to giving you further loans if you manage this situation the way you have said you will. It will also free you up to focus on other debts and lead you on a path to a healthier financial life.

Once you have reached this point, it's important not to fall back down the hole. Make sure you have better financial planning in future and follow tips to keep you financially sound.

What to Remember When Writing a Hardship Letter

At some point in your life it’s possible that you’ll become victim to some type of financial trouble. It could be for any reason from adding an addition to your family to losing someone. When these things happen, creditors are willing to be a little lenient but you’ll need to write them a hardship letter.

There are many aspects that you’ll have to keep in mind to write an effective letter in terms of what to include and structure. To help you get the assistance that you need, here is everything that you should remember when writing your hardship letter.

The Purpose of Your Hardship Letter

Before you can start writing your letter, you have to figure out what the purpose of it is. What is your goal? Here are a few options:

  • Bring your account current
  • Suspend past due amounts
  • Lower your current minimum payments
  • Adjust your interest rate
  • Modify your loan
  • Consider a settlement option
  • Agree to a short sale of a home

If you have no idea which avenue you want to go down, you can see a financial coach to have them break it down for you. Now that you’ve got your goal in mind, you can sit down and write a draft of the actual letter. Here are a few writing tips to get you started toward writing an effective letter.

Make it Original

It’s okay to find a hardship letter template online and use it as a base for writing the actual draft but you don’t want to follow it word for word. You need to come across as sincere in your letter. If you follow a template you found, you risk sounding like a robot. It’s better to be original.

Be Honest

If you lie in your letter, the lender will find out. You need to describe your situation honestly and provide documents to back up any big claims that you make. Also, they may call you and ask you to describe your situation in better detail over the phone. Answer their questions open and honestly.

It Should Be Concise

You’ll be tempted to give your entire tragic backstory in the letter, but this is a bad idea even if it’s a huge situation. Write down the most important details only to keep things concise. Creditors are busy people. They get letters like this all day, so if you turn in a paper stack it may take a while for you to get a response. Keep it to one page.

Don’t Shirk Responsibility

Your letter is your place to explain your situation, not name names and point fingers. Blaming someone else and not taking responsibility will cause any creditor to raise their eyebrow a bit. Describe your exact situation, how you responded to to it, and how the creditor can help you get back on your feet.

Don’t Use Fancy Words

Again, you want your letter to be short, sweet, and to the point. It will be a bit hard to do this if you fill the space with big fancy words. You won’t impress the creditor with that. You need to write it so it’s simple enough that someone at a 6th-grade reading level can understand it.

Don’t Stray from Your Objectives

Don’t stray from your objectives. You are in a horrible financial situation and need the creditor to help. Don’t beat around the bush with it. You have to convince them that you can’t get out of the situation that you’re in without them.

Give an Action Plan

Do the hard part for them and go ahead and decide a solution for yourself. If you tell them what you want from them all they need to do is approve your request. Simple as that. Tell them exactly what it is you want them to do rather it be to call you to discuss options or put a loan on hold for a little while.

See a Financial Coach

Everyone needs a good editor and a financial coach can be yours for your hardship letter. They can review it for you to make sure that you made your point. They can also check it for any big grammatical or spelling errors.


So, you know what to write but how do you write it? Your letter needs to follow this specific structure:

  1. Describe the Hardship – You should use the first paragraph of the letter to introduce yourself and tell them about the situation that you’ve found yourself in. You should also use this paragraph to express your interest in getting help from the creditor.
  2. Your Response to Said Hardship – Once you’ve described your hardship you’ll move on to your response to the hardship in the next paragraph. This is where you’ll tell them what you’ve done or doing to try and resolve the problem yourself. It’s easy to make light of your situation in this section. Make sure that you don’t do that and instead use the paragraph to support your need for help.
  3. State the Goal – Your third paragraph is your goal. It’s where you’ll be telling the creditors exactly what it is you need them to do for you. Let them know your willingness to work with them to find a solution that will fit both of your needs.
  4. Enclosures – Your last paragraph is your closer. It will have the basic “thank you for your time and I hope to be able to work together to fix the problem” message. You’ll also want to close things off by providing documentation that matches up with your claims.

Everyone falls into financial hardship at some point in their lives. It’s nothing of which to be ashamed. By writing a hardship letter you’ll be able to get back on your feet if the creditor approves your request. Take your life back from your debt.

When You Should Write A Hardship Letter

For many years you have enjoyed the best job in the world. You have all your bills paid up and money stashed in the bank. There are no creditors calling your home or work. Life is pretty predictable at this point. Then one day all that changes. Your boss calls you in his office to say the company is cutting back and your job is eliminated. You beg for mercy or a different placement, but there is none to be had.

Then the struggle begins.

While you are out of work, your savings becomes spent. There is nothing left and the creditors just don’t care. They keep ringing your phone off the hook and sending those nasty settlement letters in the mail. You are at your wit’s end and don’t know what to do. You think about giving up. What’s the point in trying anymore? When you reach this moment, a hardship letter could be a smart solution.

What is a Hardship Letter?

According to the experts at Legal Zoom, a hardship letter is just what it says. It is a letter written by you, the borrower, to your creditor explaining your situation. At any point when you need assistance or an alternative payment option, most creditors will require you to write a hardship letter.

Your letter should provide the creditor with a detailed explanation of what assistance you need. The cause of your hardship and what your current situation is, in relation to finances, are also to be included. Creditors need the full picture. Don’t hold anything back. If they fully understand your situation, you are more likely to receive the assistance you are asking for.

When to Start Writing

According to the Business Insider, the average American is carrying over $5,000 in credit card debt. This number is rising each day. With a number like that, any life change could lead to a hardship letter. Below is a list of situations that may lead you to write a letter. Keep in mind this list is not exhaustive.

  1. Loss of Income – Anytime you lose your source of income, which may come from losing your job or relocating, the danger of hardships is likely to come your way. Deciding to pay your bills or buy groceries for your family are everyday questions to answer. The time between jobs can be stressful, but with a hardship letter, your creditor may take some of the stress away.
  2. Suffered an Injury – If you been injured at work, in an automobile accident, or doing repairs at home, your income may change. While you’re out of work, you may receive compensation less than your usual salary. This lessens the number of monthly payments you can make. Write that letter and explain your situation. There may be an alternative payment method available.
  3. Home Has Not Sold – Relocating means buying or renting a new home. During this time, you will need to sell your previous home. Who wants to pay two mortgages? You may need to ask your creditor to refinance or defer a few payments.
  4. Death of a Family Member- This event definitely leads to unexpected expenses going out of your pocket. When you pay over $5,000 in funeral expenses, you are bound to hit tough times. Finances may not be at the front of your mind and bills get behind.
  5. Military Service- Serving your country may send you away from home. In order to pay your creditors, special arrangements may need to be made.
  6. Divorce/Separation- Legal expenses can add up quickly making it hard to keep up the payments.

During any of these times, you may want to write that letter sooner rather than later. Don’t wait until you are significantly behind. It may actually make getting help harder to achieve.

Tips for Writing a Hardship Letter

Writing a hardship can be a daunting task. It is as if you are admitting defeat. We all hit those tough times and must ask for help. That’s okay!

Creditors are not going to put hardship letters at the top of their agendas. The bottom line is that they want their money back. In order to make sure your letter gets in the right hands; it needs to be stellar.

Let’s examine some tips for writing a hardship letter that no creditor can resist.

  • Concise is the word- There is no need to add fluff in this letter. You want to keep it simple and to the point. This will keep your audience tuned in. Don’t make them put your letter down because it was three pages long.
  • Make your request specific- Tell the creditor exactly what you are asking for whether it be a lower interest rate, refinance your mortgage or forbearance.
  • Explanation of your hardship is essential- In this portion of the letter, clearly lay what your hardship is, how you got there, and why it has affected your ability to make on-time payments. If their multiple circumstances leading to the current hardship, be sure to list them. Again, no fluff, just the facts.
  • Be sure to restate your request at the end of your letter- This is the place to remind the reader of what you’re asking for and show humility. Remember that you are asking for a measure of grace in a hard situation but ultimately the creditor has control.

Making the choice to ask for help in the form of a hardship letter is not a sign of weakness or failure. It is a sign of strength. You have the bravery to ask your creditor for help. Knowing what a hardship letter is when to write one, and tips to make it stand out will give you peace of mind and hopefully a helping hand to your finances.

Will you give in to the thought that you will never be free of debt because life threw stones at you or will you give the amazing hardship letter a chance?

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.


student loan hardship

Student Loan Hardship: How to Use Financial Hardship to Lower Your Loan Payments

There is a growing problem in America. Student loans have gotten out of control, and more borrowers are suffering under student loan hardship.

It’s easy to see why. The student loan crisis is reaching a tipping point. People owe more in student loans than credit card debt.

There are 4.7 million borrowers in default of their student loans. You don’t need to be one of them. If you’re experiencing financial hardship, there are programs in place to be able to pay your loans without defaulting.

Keep reading to learn what you can do about your student loans when you’re experiencing financial hardship.

America’s Financial Problem

Between economic disparity and stagnant wages, it’s easy to see how we got to this point. In 2017, graduates left school with a degree and $37,000 in debt.

This amount of debt leaves recent graduates with a choice. Do they buy a home or do they pay off their student loans

They have little savings, have put off major life decisions like having children and getting married. They find that the weight of this burden is stressful.

It’s not just 20-somethings that struggle with student loans. People of all ages, even those in their sixties have reported having student loan hardship. That impacts their ability to save for retirement.

Repayment Options for Student Loan Hardship

There are options to repay your student loans if you’re experiencing financial hardship. It doesn’t need to be the end of the world. You just need to know your options.


You want to lower or temporarily stop your student loan payments when you’re dealing with financial hardship. You may be able to do that through forbearance. Your ability to apply will depend on your lender.

Those with a private student loan will have to check with their lender to see if this is a possibility. Federal student loans do offer forbearance as a temporary solution to financial hardship.  

If you see your student loan hardship as a temporary situation, you can apply for forbearance for two months. You won’t have to make payments during this time.

Forbearance is available for only 12 months out of the life of your loan. In a 20-year repayment plan, you want to use this option sparingly.

This could work for you if you’re in-between jobs and you know for sure that it’s a temporary situation. Under forbearance, you are responsible for the interest that accrues during the forbearance period, whether your loans are subsidized or not.


A deferment is similar to forbearance, but interest does not accrue on subsidized loans. With unsubsidized loans, the interest will accrue and that will be added onto the balance that is owed.

You can apply for an economic hardship deferment by contacting your lender. The deferment is good for up to three years. You’ll need to provide your lender with documentation to prove your financial hardship.

Both deferments are forbearance are short-term solutions to student loan hardship, ideally for six months or less.

Income-Based Repayment

Long-term solutions to student loan hardship can be used to lower your monthly payments. That could be enough to give you a little breathing room in your budget. These are called income-driven repayment plans or IDRs.

Income-based repayment (IBR) is one of the more popular options. Your repayment plan is 10-15% of your discretionary income. With this plan, you’ll go from a 20-year repayment plan to 25 years.

At the end of the 25 years, whatever the remaining balance left will be forgiven. Before you get too excited about that, know that the forgiven amount will be treated by the IRS as taxable income, leaving you with a huge tax bill that year.

Most federal loans are eligible for IBR. Your interest will accrue on unsubsidized loans, which can increase the balance of your loans over the repayment period.


Pay as you earn is similar to the IBR program, but there are more stringent requirements. You must have started borrowing on or after October 1, 2007, and you have borrowed through the Direct Loan program.

The main advantages are that your payments are capped at 10% of your discretionary income and interest can be limited.

PAYE may ask that come loans are consolidated before they’re approved. Under this program, your loans are forgiven after 20 years, instead of 25.

Employers Assist with Student Loans

Companies want to attract the best and brightest to work for them. They’re starting to recognize the stress that student loans have on their employees. That stress can impact how they do their jobs and impact productivity.

Employers are starting to offer student loan repayment as part of their benefits package. They’ll offer to make a monthly payment to student loans, while you make a monthly payment as well. That can save you a lot in payments.

As of right now, note that these payments are seen as taxable income by the IRS. While these payments can ease the burden of student loans, they can create another mess with the IRS.

There is a law pending in Congress that may allow these contributions to be tax-free. Contact your legislators to get your voice heard.

Help for Student Loan Hardship

Student loans have become a massive burden for Americans of all ages. With student loan debt skyrocketing to unprecedented levels, it has become more difficult for borrowers to repay their student loans.

You don’t need to default on your student loans. There are programs available if you’ve lost a job or have a student loan hardship. The best thing to do is to call your lender and work out a repayment plan that won’t be a massive burden on you.

Would you like more tips about handling debt under financial duress? Check out this article to learn the art of writing financial hardship letters.

financial hardship

A Guide to Financial Hardship: Here’s When You Should Consider Using a Hardship Letter

When it comes to their financial health, many Americans are just barely treading water. 

Only 30 percent of Americans have some kind of long-term financial plan, and 31 percent have less than $500 set aside in emergency saves. Nineteen percent don’t have any money saved to cover the cost of an emergency expense.

Do these situations ring a bell to you? Are you currently struggling to scrape together funds to make ends meet and pay the bills? If so, you might be able to use a financial hardship letter to get a fresh start.

Read on to learn more about what constitutes financial hardship and when you ought to consider using a hardship letter.

What is a Hardship Letter?

A hardship letter is a letter written to a lender explaining why you cannot make the payments you previously agreed to pay.

You might also use a hardship letter to explain why you’ve chosen a specific approach to get rid of or minimize your debt, such as a short sale on your home, a loan modification, or suspension of past due payments.

Hardship letters are typically comprised of three components:

  • How you got into your current financial situation (i.e., what has changed since you originally took out your loan)
  • What you’ve done to try and fix the situation
  • Why your previous attempts have not worked

A well-written hardship letter can help you begin to correct your situation and regain control of your debt and finances.

The key, of course, is to make sure your situation is actually considered to be a financial hardship. You’ll also need to avoid common mistakes that may cause a lender to reject your letter.

When Should You Use a Financial Hardship Letter?

There are only certain situations in which a lender will honor a hardship letter. Some of these specific situations include:

  • Losing your job
  • A sudden reduction in income (due to situations like furlough, a new job, your partner’s loss of job, a pay cut, etc.)
  • An illness or medical emergency
  • A sudden job transfer (either voluntary or involuntary)
  • A divorce or separation
  • An extreme change in your mortgage terms (often the result of an adjustable-rate loan)
  • Military service
  • A death in the family
  • The incarceration of a family member
  • A sudden increase in expenses or debts

An unexpected catastrophe can also bring on financial hardship, especially if it necessitates significant maintenance or major repairs.

How to Write a Financial Hardship Letter

Do any of the above situations apply to you? If so, you might want to consider writing a hardship letter to your lender explaining the situation. 

Not sure how to write a hardship letter? These guidelines can help:

Make Your Request as Specific as Possible

For your letter to be taken seriously, you need to be very specific about your objectives. What do you want the lender to do?

Do you want them to suspend your past due amounts? Do you want your interest rate or monthly minimum payments adjusted? The more specific you are, the better.

Explain Your Hardship

Next, you need to explain why your situation ought to be considered a hardship. Keep this section concise.

Simply sum up what has happened in your life over the last few months and why those events have made it hard for you to keep up with your loan payments.

Explain the Steps You’ve Taken to Correct it

It’s also important to explain what you have done so far to correct your situation. Have you cut your expenses or taken on a second job?

Explaining what you’ve done will help your lender see that you have taken action but still need additional help. 

Restate Your Request Clearly

End your letter by restating as clearly as possible what you would like your lender to do.

Be as explicit as you can and make it clear that, once you receive what you’re asking for, you will be able to keep up with your payments without any additional issues.

Include Supporting Documentation

It’s also helpful to include documentation that backs up the points you’ve made regarding your financial situation. For example, you might want to include copies of your medical bills or a copy of your divorce order.

If you include these documents, address them in your letter as well. Just a sentence or two explaining what they are is sufficient.

Keep it Short

Remember, your letter should be short and to the point.

Your lender is busy, and they receive tons of letters and emails every day. They don’t have time to read a novel about your current financial situation. Limit it to one page or shorter, if you can.

Be Humble

A little humility goes a long way when you’re writing a hardship letter. Avoid placing blame on your lender or any of the other parties involved in your situation. Keep your tone as neutral and objective as possible.

Be sure to thank your lender for their time, too. Remember, you need their help. If the person reading your letter thinks that you’re being hostile, aggressive, or ungrateful, they may reject your request. 

Have Someone Review Your Letter

Finally, it can be helpful to have someone review your letter before you mail it.

If you’re working with a financial coach or a nonprofit housing counselor, he or she can review your letter and help you with any changes to the tone or wording that they think might increase your chances of having your letter accepted. 

Do You Need to Write a Financial Hardship Letter?

Do you think a financial hardship letter can help you with your current financial situation? If so, be sure you follow these guidelines when writing it. 

Do you need more guidance on how to write your hardship letter? Are you looking for examples or specific information on what to include and avoid? If so, we can help.

Check out the hardship letter archives on our site for all kinds of useful articles. This one, which is all about writing an effective hardship letter, is a great starting point.