Writing A Hardship Letter To Stop Foreclosure

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The U.S. Government believes that if homeowners are facing the threat of foreclosure, there are a number of things that they should do. The first is to make sure that they stay in direct communication with their lenders, rather than ignoring them in the hopes of the problem simply vanishing at some point. If they receive any requests, or if they receive any court documents, these must be responded to as soon as possible. However, the U.S. Government also believes that people should be able to stay in their homes. So much so, in fact, that the government has rendered those who leave their property incapable of receiving any help. This is quite significant, both for lenders and borrowers.

The problem with forcing people to remain in their homes is that they often stop treating the property properly. Lenders who have had to foreclose on homes have often found them to be in a state of significant disrepair and squalor. This is a terrible situation in and of itself, but it is one that may be able to work in your favor to a degree. Indeed, if you write a hardship letter to stop foreclosure, you can cite the fact that it means your lender will not be left with a neglected property. However, you must be very careful with this, as threatening or blackmailing your lender in any way will not go in your favor.

Before Writing the Hardship Letter to Stop Foreclosure

Before you write a letter of hardship, consider whether there is other help out there first. For instance, you may be approved for a Housing and Urban Development (HUD) program. These are counseling agencies that can help you find solutions to your problems and help you stay in your home.

Content of the Hardship Letter to Stop Foreclosure

If you do find yourself in significant hardship, then you may want to consider writing this type of letter. You should make it clear which property you are discussing and when you first started to own it. Explain that, as of a certain date, you started to fall behind on payments and that this is because of a certain situation. Detail the causes of your hardship, such as loss of a job, medical bills, or death in the family, and make sure they are dated as well. Indicate that, as a result of this hardship, you have not been able to keep up with your mortgage payments, stating how much they are.

Explain that you hope to be able to avoid foreclosure. State that your home is not currently on the market and that you would like to remain in it. If you do want to sell your property, explain that it has been listed since a certain date and for what price. If you want your lender to approve a short sale, this is important information.

Next, you should offer a solution. This could be a temporary loan modification, for instance. Be to the point and factual, so that your lender is not left with any unanswered questions.

Hardship Letter To Stop Foreclosure Example

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

{Date}

RE: stopping foreclosure on {address of home}

To Whom It May Concern:

I am writing in the hopes that this letter will help to stop the foreclosure proceedings on my home at {address}.

I have owned this home since {date}, and have recently begun to fall behind on payments due to financial hardship. This hardship was caused by {details of the hardship; could be medical bills, death, job loss, etc.} and has left me unable to keep up with the mortgage payments of {amount in dollars} per month.

I would like to avoid foreclosure. I {am/am not} committed to staying in my home. My home {is/is not} on the market. {If it is on the market, indicate the current asking price, and if you are requesting approval of a short sale}.

{If you are trying to consolidate or restructure your loan, indicate that here, along with any plan you have in mind for doing so} .

I have attached all my relevant financial documents, including {list of what you’re attaching}. I hope we can work together to avoid the complications and price of foreclosure.

Please contact me at your earlier convenience.

Sincerely,

{Sender Name}

Writing A Hardship Letter 401k Withdrawal

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Normally, you are not allowed to take money out of a 401k, but some exceptions do exist. If you are undergoing serious financial hardship, the Internal Revenue Service (IRS) does offer hardship withdrawal solutions. However, to be considered, employers must also allow such a withdrawal, and you will need to write a hardship letter to prove your case as well.

Writing this type of letter is quite difficult. First of all, your employer will need to make sure that you qualify for a withdrawal under the IRS rules. Additionally, you have to be able to demonstrate that your financial hardship is not just something that is of a short-duration, but one that it is a very heavy burden for you.

It is very important that you write your letter properly. It has to be written in a formal style and there should be no grammatical or spelling errors in it. The recipient of the letter should be the person within your company who manages the retirement accounts. You must also make sure that you keep copies of any letters you send or receive. And do make sure that if you have any documents that prove your hardship, you should include (and copy) them as well.

Reasons for Qualification

Common qualification reasons include:

  • Medical expenses for self or dependent
  • Making a down payment on a primary home
  • Need to avoid eviction or foreclosure on a primary home
  • Expenses for education
  • Home repairs that are essential
  • Funeral expenses

What to Do If You Qualify

If you do qualify, you must then look at the hardship withdrawals that your employer offers and speak to your supervisor to find out to whom to address the hardship letter. There are significant legal issues to face, and deciding whether or not you will be allowed a withdrawal is complex. If your company has its own guidelines in place, they may be tougher than the federal criteria. Furthermore, you will have to pay taxes on the withdrawal, and sometimes you will have to pay a penalty on it as well.

Clearly, withdrawing from a 401k should only be done in extreme situations. It will have a significant impact both on your income today and in the future. Additionally, you may not be allowed to add new funds to your 401k for a 12 month period as a result of your withdrawal. These are all significant considerations to make.

What to Do After Sending the Hardship Letter

Once you have sent your hardship letter requesting a withdrawal, you should call them through the telephone after around one week to make sure that it has been received. In fact, it is recommended to send it through registered mail, requesting a receipt as well. However, it is important to understand that your employer is under no obligation to allow your withdrawal. Because the process is so long and complicated, it is important that you get the ball rolling as soon as you start to realize that financial difficulties may lay ahead. There is no way, in other words, that you will have a withdrawal in your account within just a few days, so it might even be too late to get you out of your hardship.

Hardship Letter 401k Withdrawal Examples

{Your Name}
{Your Address}
{Your Phone #}
{Your Account #}

{Date}

To Whom It May Concern:

Please consider this a formal request for a {monetary amount} withdrawal from my 401K account due to financial hardship. At this time, I am facing {foreclosure, bankruptcy, eviction, educational termination, etc.} due to {disability, illness, medical bills not covered by insurance, etc.}.

If approved, the withdrawal will allow me to {pay my rent, afford daily expenses, stay in school, meet medical needs} for {amount of time}. This is an immediate and unbearable burden on me and my family. I have already attempted alternative options, such as {taking out a commercial loan, drawing from an IRA, etc.}, but unfortunately, {result}.

This withdrawal will save me from having to {drop out, foreclose, declare bankruptcy}. I appreciate your time and consideration with regards to my request. Attached are my financial statements, pay stubs, and loan responses.

Thank you,

{Sender Name}

Writing A Hardship Letter To Bank Of America

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If you have a loan with the Bank of America and you find yourself in a situation of hardship, you could consider writing to them to ask for some sort of reprieve. It is very important, however, that you follow the accepted rules when it comes to these letters. This starts with identifying your hardship, and whether what you are experiencing counts.

What Is Hardship?

Hardship is a situation beyond your control that negatively affects your finances. For instance, the death of a family, a loss of a job, a sudden illness, a job relocation, divorce or separation, or an involuntary reduction in income, are all reasons for hardship. Generally speaking, this is also of a temporary nature.

Hardship letters are formal documents and must be treated as such. They should be properly addressed and written without grammar or spelling mistakes. The subject line should also include your account number. Furthermore, the letter should be short and to the point, focusing on facts rather than feelings.

How to Start Your Hardship Letter to Bank of America

Start your letter by explaining that you currently live in a property onto which a Bank of America mortgage has been secured. State that you have fallen behind on your payments, adding a specific date, and that you hope to come to a resolution. Explain that you are currently experiencing a situation of hardship and evidence this. Include copies of medical statements and bills, job changes, legal divorce proceedings, and so on. Again, make sure that you add the date of each of these happenings, so that the lender can create a timeline.

Make Your Proposal and Indicate How Long This Will Continue

You should then make an offer, which has to be one that you can afford. Do not make any promises that you will be unable to keep, as this will leave you in a much worse situation. Indicate exactly how much you are able to pay and from what date. You should also state any proactive steps you have already taken to lower your expenses, such as budgeting better and avoiding luxurious habits.

Finally, you should outline how long you expect the said situation to continue, and how you intend to repay the shortfall after the situation is resolved. Make it clear that you wish to remain in your property and ask whether there are any programs of the Bank of America that you may be eligible for. For instance, there is the Home Affordable Refinance program, the Home Affordable Modification program, and the Home Affordable Foreclosure program. Make sure that you indicate which one you are interested in.

Ending the Letter

End your letter by listing all your attachments. Those should, when put together, be a full financial statement of you and your current situation. If there is any other information that you believe may be useful, add it to the list as well. Finally, thank Bank of America for taking your letter into consideration and tell them that you await their response. Do keep copies of your letter and send it via registered post.

Hardship Letter To Bank Of America Example

{Account Number}
{Your Name}
{Contact Number}
Bank of America
ATTN: Home Loans
{Address}
{Address}

{Date}

To Whom It May Concern:

I am writing with regard to my home at {address}, which has a mortgage owned by Bank of America. I have been behind on my mortgage payments since {date}, and I am writing to begin the process of resolving this situation.

I fell behind on my payments because {detail the reasons for hardship, including medical problems, death, job loss, etc.}, which occurred {date}.

I am unable to pay the monthly payments as is, but I believe I can afford {amount in dollars} per month, beginning {date}.

My home {is/is not} up for sale, and the property taxes and homeowner’s insurance {is/is not} current.

I know that Bank of America has programs such as Home Affordable Foreclosure, Home Affordable Modification, and Home Affordable Refinance. I am interested in {name of the program that suits your needs}.

I have attached my financial information, including a detailed account of my income, recent pay stubs, and {any other information they’ve asked for or you think is relevant}.

It is my hope that we can bring a swift and satisfying resolution to this problem as quickly as possible.

Please contact me at your earliest convenience.

Sincerely,

{Sender Name}

Writing A Hardship Letter To Mortgage Company

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A hardship letter is a very important piece of communication that you may need to write if you are in financial difficulty and want to have your loan modified. It is very important that you write the letter in an accurate and polite manner, which may be enough to convince your mortgage provider that you are worthy of a chance to keep your home. It is normal to feel intimidated because you have to tell an institution some personal things and you are not guaranteed that your request will be accepted. However, not writing the letter may mean that your property will be foreclosed upon.

Consider the Various Options that You Have

The first thing you have to do is consider every other option. This is firstly because those options are often easier to be accepted for than a loan modification and, secondly, because your lender will want to see that you have already been proactive in resolving the situation. If there really is no other option out there, you must contact your lender and inquire as to whom to address the hardship letter to and what the letter should include. It is possible, for instance, that they have forms that you have to fill in. Mortgage companies change hands quite often as well, which is another reason why you must call them first: the company you took your loan out with may not be the one that still holds your mortgage today.

Estimate How Much You Are Able to Pay at the Present Time

You should then calculate exactly what you can afford in regards to payments. What you should never do is write a letter that leaves any questions unanswered. Rather, you have to explain that you are in difficulty, why you are in such a situation, and what it means. You should then state which payments you have already missed (if any) and you believe you will still miss (if any), and why. You should then explain how you intend to pay for those missed or late payments later on and when.

Explain the Facts of Your Current Situation

Finally, you need to provide the facts as to why you are in your current situation. That this is factual is perhaps of the greatest importance. They do not want to know how hard it is on you emotionally, as that is already a given. Rather, they want to know what happened, why it happened, how long you expect it to last, and how you aim to fix it.

For example, if you were hospitalized and this caused you to miss several days of work, as well as having substantial medical bills, indicate that. You must also state when you intend to return to work, and when your income will return to normal. You have to explain, at that point, how you intend to get back to making your regular payments, and also how you aim to pay for the shortfall once you are back on track. You must show yourself as being apologetic, proactive, and willing to come to some sort of arrangement. While all of that will not guarantee that your lender will agree, such things will usually make it more likely.

Hardship Letter To Mortgage Company Example

{Your Name}
{Your Address}
{Your Phone #}
{Your Loan #}

{Date}

To Whom It May Concern:

I am writing this letter to explain the reasons why I have {or will soon become} delinquent on my mortgage payments, and to request that we work together to avoid foreclosure on my home.

My income has become drastically reduced recently, due to {sickness, death in the family, job loss, etc. BE SPECIFIC}. The money I have remaining every month must go to {food, car payment, medication, etc.}. I have done everything in my power to keep up with the payments, but it unfortunately has become impossible {or will become impossible as of a certain date}.

I believe I can resolve my debt by {explanation of how you intend to pay them back OR a request that they provide a “workout” solution for your loan}.

Please understand that I know I signed a contract and that I am responsible for these payments. I am not attempting to shirk my responsibilities, but there is also only so much I can do when I still need to keep food on my table.

It is my intention to stay in my home, so I hope we can work out a solution as quickly as possible.

Thank you,

{Sender Name}

Writing A Hardship Letter Extended Leave

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There are numerous types of hardship letters. Usually, they are requests for financial assistance, either in the provision of a grant, for instance, for funeral expenses; or a delay of taking payments, for example, with a loan or mortgage. However, another possible reason why you may write a hardship letter is if you want to request an extended leave.

When Do You Need an Extended Leave Hardship Letter?

When you are employed, you will be allocated a number of days of leave per year, which you can use at your personal discretion. A lot of employers also have other forms of leave in place, such as maternity leave and even paternity leave, time off for funerals, parental leave if a child is sick, and so on. Sometimes, a situation may occur in which you need more leaves, for a variety of reasons. Perhaps you have a relative who has developed a sudden but serious illness and requires care. Or you may have been declared bankrupt and are struggling to meet the responsibilities associated with that. These are all cases in which you may want to request an extended leave.

How to Write a Hardship Letter for Extended Leave

All hardship letters, regardless of purpose, should never be longer than one page. They should be short but to the point, in other words. They should also be honest and provide a clear and concise explanation of what is going on. Your letter has to be formal, explaining that you have unexpected hardship that requires you to request that extended leave.

Your letter should explain when you first started to experience difficulties, which is something that your employer should already be aware of. It should highlight what has caused an unexpected situation, such as illness, death in the family, disability, and so on. It should also explain that you have already used all your paid leave in accordance to corporate policy. Your letter should also indicate what would be the consequences if you are unable to be on leave, and why that would be so. Make sure that you also indicate the length of your extended leave.

Make sure that your letter also expresses your gratitude for working in your company. Showcase that you have been an excellent employee and that you feel committed to the organization. The letter should make it clear that you do not want to leave the company as a whole, but rather that you would prefer to have an extended leave. Be accommodating, however. Perhaps you could work a few hours during the week, even if it is to train a temporary replacement. More than anything, tell your employer that you intend to come back as soon as you possibly can.

Last but not least, place the ball in the court of your employer. Ask them to contact you with possible solutions to the dilemma, while making it clear that you would like to find a mutually agreeable solution. In doing so, you are demonstrating to your company that you are a committed employee.

Hardship Letter Extended Leave Example

{Your Name}
{Your Address}
{Your Phone #}

{Date}

Dear {Mr./Ms. BossName}:

I would like to make a formal request to take an extended leave from my position as {position} here at {Company Name} on account of severe hardship.

As you may already know, as of {date} I have been struggling to accommodate the unforeseen impact of {disability, sick family member, death in the family, bankruptcy, illness, etc.}. I have taken all the paid leave I am able to take according to corporate policy, but if I don’t continue to {description of action taken while on leave}, it will result in {consequence}.

I love working at this company, and I have always made every effort to be a model employee. I feel that the work I do here is good and important and I don’t want to leave it. Instead, I am asking for extended leave until {date/further notice} so that I can {recover, care for a relative, etc.}. I can come in {part-time, a few days a week, etc.} to train a temporary replacement, but it is my hope to return to work as soon as I am able.

Please let me know if there is a way to work this out between us. Thank you for your time and your consideration in this matter.

Thank you,

{Sender Name}

Writing a Hardship Letter to Wells Fargo

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If you want to write a hardship letter to Wells Fargo, then you have to start by explaining who you are. This means indicating your name and address, and including the fact that the mortgage is owned by Wells Fargo. Naturally, you should also indicate your account number. You then have to explain that you are in financial difficulty and that has caused you to miss payments, or that you expect to miss some payments in the near future on your mortgage, mentioning the relevant dates. Don’t forget to inform them that you wish to resolve the issue as soon as possible.

What to Include in Your Hardship Letter to Wells Fargo

Explain the reasons for your late payments. For instance, you may have had a medical emergency, perhaps a family member has died, or perhaps you have lost your job. You should also include any relevant dates in relation to this. You should explain that this situation has made it impossible for you to make your payments. You should also indicate what types of payments you can make, when you can start with those, and how soon will you be able to make those payments.

Do also explain that your property is not currently up for sale and that you are struggling with making insurance payments and paying your taxes, if that is applicable. You should also include any financial documentation that can prove what you are stating, such as a detailed income statement, your most recent pay stubs, and any information that you feel is important for them to know.

End your letter by explaining that you hope the resolution can be satisfying and swift for both yourself and Wells Fargo, and that you look forward to hearing from them. Last but not least, you also have to make sure that you meet all the requirements as stated by Wells Fargo.

Wells Fargo Requirements

Wells Fargo will only take a hardship letter if it provides a clear description of your situation and how this caused your financial difficulty. Examples include loss of job, illness, overextended use of credit, or a reduced income not by choice.

Additionally, Wells Fargo expects you to fully explain what you have done in an effort not to default on the loan you have with them. For instance, you have to demonstrate that you have already used up all of your savings, and that you have cut down on unnecessary expenses. Furthermore, they want to see what you hope to achieve, for instance, a reduced principal or a lower interest rate.

They also want to make sure that any further delays are avoided as much as possible. Hence, they recommend that you make sure that all your document copies are clearly legible, and that you only include any documents that have not been in any way altered. If correction fluid, for instance, is seen on the documents, they will not be accepted. Last but not least, you must make sure that you mention the number of pages in your document, counting even the blank ones, so that they can check that they aren’t missing anything.

Hardship Letter to Wells Fargo Example

{Account Number}
{Your Name}
{Contact Number}

Wells Fargo Financial Real Estate
ATTN: Home Preservation Department
{Address}
{Address}

{Date}

To Whom It May Concern:

I am writing with regard to my home at {address}, which has a mortgage owned by Wells Fargo. I have been behind on my mortgage payments since {date}, and I am writing to begin the process of resolving this situation.

I fell behind on my payments because {detail the reasons for hardship, including medical problems, death, job loss, etc.}, which occurred {date}.

I am unable to pay the monthly payments as is, but I believe I can afford {amount in dollars} per month, beginning {date}.

My home {is/is not} up for sale, and the property taxes and homeowner’s insurance {is/is not} current.

I have attached my financial information, including a detailed account of my income, recent pay stubs, and {any other information they’ve asked for or you think is relevant}.

It is my hope that we can bring a swift and satisfying resolution to this problem as quickly as possible.

Please contact me at your earliest convenience.

Sincerely,

{Sender Name}

Writing A Hardship Letter Loan Deferment

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In writing a hardship letter loan deferment, you will need to fully demonstrate what is your current financial situation. It should be noted that in order to be able to apply for some sort of loan deferment, you will have to meet a number of specific criteria. Usually, such a deferment will apply to mortgage payments and they are designed to help people avoid foreclosure.

In your letter, you will have the chance to highlight your circumstances, and all that you have done to turn it around. It is your chance to show that you suffer from an “acceptable” hardship. Mainly, it is an opportunity to prove that, as soon as you can, you will continue with your payments and repay what you owe.

Acceptable Hardships

There are a number of acceptable hardships, including:

  1. Involuntary reduction in income through loss of job or change in hours
  2. Death of a family member
  3. Illness of a family member
  4. Separation or divorce
  5. Forced relocation for work
  6. Shock from the adjustable rate reset
  7. New and higher expenses

How to Write a Convincing Letter

Your letter needs to be short and to the point, while providing your lender with a clear understanding of what is going on. Remember that lenders constantly receive this type of letter, with people looking for ways to keep their home if they experience some difficulties, so yours has to stand out. Here are some key tips:

  • Keep it short and sweet.
  • Clearly describe your hardship and why you are in that situation. Tell the lender when your hardship started, which should be linked to when you began to have payment difficulties. Make sure that the connection between missed payments and your hardship is established.
  • Explain what you have done and/or doing to improve the situation.
  • Present a plan for you to get back on track.
  • Make it clear that you are responsible and motivated to get back on track, and showcase that you are a pillar of the community, for instance, by discussing your volunteer work or other community activities.

You are not alone in your hardship. In fact, although the recession is said to be over, many people are having some kind of difficulty. Banks are quite forgiving if you communicate with them and that you are honest about your situation.

Last but not least, be aware of the fact that writing a hardship letter loan deferment is just the first part of your overall loan modification. Your lender will get in touch with you to request proof of your new income and they will also want a full financial statement. If you do contact your lender with a request for loan deferment, make sure that you have studied the process properly and that you are armed with negotiating tips to help you be more likely to be successful. Make sure that you also look into the different approval guidelines of your lender, and whether the stimulus home saver plan implemented by President Obama is applicable to you. This way, you will know exactly what you are and aren’t entitled to.

Hardship Letter Loan Deferment Example

{Your Name}
{Your Address}
{Your Phone #}
{Your Loan #}

{Date}

To Whom It May Concern:

My name is {Name} and my account is {number}. I am writing to request a one-time deferment of my loan for the next {amount of time} due to severe hardship.

For the last {amount of time}, I have paid {amount} of my loan every {interval}. I have always made an effort to pay my installments on time and in full. However, as of {date}, I was met with the unexpected hardship of {brief description of financial, professional, family, or medical hardship}. Since the incident, I have only been able to afford the most basic necessities.

I am making every effort to get back on my feet, and I already {lined up a new job, recovered from my injury, etc.}. If I can defer my loan until {date}, it will allow me to recover from this incident and return to my normal payment plan by {date}. I am open to installment additions and plan adjustments at that point, and will try to accommodate any necessary changes.

Attached are my financial statements and {medical bills, pay stubs, etc.}. Thank you for your consideration and understanding. I hope to hear from you at your earliest convenience.

Thank you,

{Sender Name}

Writing A Hardship Letter For Housing Exemption

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This particular hardship letter is written by students who want to be exempted from the college or university housing requirement. This is because the college or university may require the students to make use of their housing accommodations unless they fulfill certain prerequisites. However, for some students, despite not being able to comply with all requirements for exemption, their only option would be to continue to stay in their homes while studying because they are unable to afford the associated expenses of staying in the university or college housing.

Guidelines in Writing a Hardship Letter for Housing Exemption

Your letter should be written in a formal manner. This means that it is addressed to the right individual and/or department, and that it includes your personal identification information. It should also be short (no more than one page if possible) and to the point, and completely free of grammar and spelling errors. Do ask a third party to proofread the letter for you if possible.

Starting the Letter

Your first paragraph should state that you are asking for an exemption from the housing requirement despite being unable to comply with every condition imposed by the college or university for a student to be exempted. State that you know the rules for exemption but you are requesting that your financial situation be also considered.

Explain Your Situation

Indicate those rules for housing exemption that you are able to comply with, such as your home being within a certain distance from the college or university. Make sure that you attach proof for these things.

Then list those prerequisites that you do not currently meet. Explain that you fully understand the reason for such rules, but it is impossible for you to raise sufficient funds to be able to live in a dorm house rather than with your parents. Again, you must provide evidence for this, demonstrating how much money you receive through a scholarship, a job, and FAFSA (financial aid) and comparing that with the expenses required for living in the college or university housing. Emphasize why you cannot make the payments. Indicate the difference of the costs of living in the housing compared to living in your home. Also, indicate if your parents are unable to provide you with any financial support for whatever reason.

Ending Your Letter

From the evidence you supply, it should be obvious that you will be experiencing significant hardship if you are not exempted from the housing rule. Place an emphasis on the fact that you simply cannot afford the expenses involved in staying in the college or university housing to the extent that you will need to withdraw from the college or university if you are not granted the exemption.

Nevertheless, avoid being emotional as much as possible, and only state the facts. If you can demonstrate the fact that should they not be able to help you, you will no longer be able to study in their school, they may be more inclined to help you.

Writing A Hardship Letter For Small Business

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If you have a small business and you are facing financial difficulties that prevent you from being able to repay a debt, you may want to consider writing a hardship letter for small business. It is very important, when you do so, that you focus on the facts and that you explain your financial circumstances in a clear, rational manner. You are likely to feel emotional about your situation, but you must try not to present a sob story. Creditors understand that being in financial difficulty can make a person emotional. However, they usually receive hundreds of these letters a week and want to be able to focus immediately on the facts. Keep it short and to the point, and you will be far more likely to get a response.

Steps in Writing a Hardship Letter for Small Business

  1. Your letter should be formally presented. Address it to the right person, and make sure it is free from spelling and grammar errors. It should also include your customer number in the subject line, so the creditor can find your information straight away. The subject line should also make it clear why you are writing.
  2. The first paragraph should explain why you have written the letter, and that you aim to find a solution. For instance, if you have rented a commercial property and you are struggling to pay your lease, then you should indicate how much you should be paying each month, how many payments you have already missed, and how long you expect your difficulties to continue. Explain that you hope to find an arrangement where you can continue to rent the property, while getting your account up to date over time.
  3. You should then explain why you are in such a situation. This is where you need to try to avoid becoming emotional. You must supply facts, using figures, evidence, documents, and more. If you present things sensibly, the response is likely to be more sensible as well.
  4. You should also describe your plan on how to turn things around. However, make sure that you are honest about this and don’t make empty promises. For instance, you can state that you have cut costs through redundancies, and how much this will save. You must make it clear that you are doing all you can to stay afloat. Creditors are more likely to be sympathetic if they see that you are really trying.
  5. Explain how you plan to make up for the missed payments. Show good faith by proposing a workable payment scheme. Give a specific length of time after which you expect to be back on track with your payments. Again, be specific, showing figures, dates, and more. Make sure not to promise anything that you won’t be able to do.
  6. Close the letter by apologizing, and making it clear that you hope to come to some sort of resolution. Indicate that if they have a different suggestion, you will be happy to hear it and consider it. End the letter by thanking the creditor for his or her time and consideration.

Hardship Letter For Small Business Example

Writing A Hardship Letter Not Delinquent

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Financial hardship can affect anybody. The problem is that while this hardship is often of a temporary nature, its consequences can last for many years. For instance, a missed payment will usually cause a negative marking to be placed on your credit file, and it can take as much as six years, sometimes even longer, for this to be removed. That can seem unduly harsh when hardship is a temporary situation over which you have practically no control. Should you find yourself in such a situation where you have not been delinquent in your previous payments but now find that you are unable to pay, it is possible to appeal to the goodwill of your creditors by writing to them.

Tips for Writing a Hardship Letter Not Delinquent

These types of letters are formal letters and should be written as such. They have to be dated, addressed to the correct person, and free from grammatical and spelling errors. You should also include your account number as well as other identifying information.

Contents of the Hardship Letter

Start your letter by indicating what you are requesting. This could be a payment delay, a consolidation, debt forgiveness, or anything else that could help ease your financial burden. It should also state the type of debt, such as credit card, a loan, or a mortgage.

State that, from the date of your writing, you have not been delinquent on payments. However, because of your financial hardship, you will become delinquent unless a special arrangement be agreed upon. Explain that you have other necessary expenses, attaching copies of your various bills, and indicate your current income. Do also provide evidence of the cause of your hardship, such as huge medical bills, death in the family, or a sudden illness. Explain that you have made all possible adjustments, such as using up your savings, taking on a part time job, and reducing your expenses, as well.

Emphasize that you wish to be proactive and that you want to come up with a mutually agreeable solution that will prevent your credit rating from being damaged. State that you are willing to accept a solution that the creditor offers as long as it is within the bounds of your current financial capability. If the request is for a mortgage, make sure that you explain whether you want to remain in your property, or whether you have already placed the property up for sale.

Propose a Payment Plan

Do also make a suggestion for repayment yourself. For instance, you can propose reduced payments for a set period of time. Only do so, however, if you know that you can afford those payments and if you know that your hardship will have been resolved after a certain period. Keep your letter short and to the point and always stick to the facts and avoid emotional statements.

Lastly, make sure that you take a photocopy of your letter and all the documents you have attached. Send the letter via registered post and keep the receipt. If there is no reply after seven days of receipt of your letter, make sure to follow it up.

Hardship Letter Not Delinquent Example

{Your Name}
{Your Address}
{Your Phone #}
{Your Loan #}

{Date}

To Whom It May Concern:

To Whom It May Concern:

I’m sorry to ask for an exemption from your University housing requirement. However, although I do not meet every condition for an exemption, I would like my severe financial hardship to be taken into account.

Your current prerequisites for housing exemptions are as follows: {list the prerequisites}. At this time, I meet the following prerequisite(s): {e.g. My parent’s house is within 25 miles of the University, I have taken at least 2 credits of college courses before, I am over 21 years old}. Attached is the necessary documentation proving that I meet these requirements.

However, I currently do not meet the following prerequisite(s): {list the prerequisites}. While I understand that these rules are in place for a reason, I hope you will understand that I cannot hope to make up the price differential caused by living in the dorms rather than my parents’ house. I am currently receiving {amount} in scholarships from the {Name of Scholarships}. I have also been granted financial aid from FAFSA in the amount of {amount} per year. The out-of-pocket expense to me and my family is {amount} per year, just for school, fees and books. My parents make {amount} per year, I have {amount} saved up for college and I contribute an additional {amount} per year from my job at {job}.

I think you can see that we are already struggling to meet the expenses accrued through my schooling alone. I could currently live at home for no additional expense, with groceries costing me about {amount} per week. However, if I were to live in the University’s housing, I would be required to purchase a package that would cost me at least {amount} per month for room and board and {amount} per month for a food plan.

I simply cannot meet these financial requirements. I would have to withdraw from the University instead, which I really do not want to do. It has always been my dream to attend {University Name} and I hope you can help me arrange a situation that is amenable to both of us.

Sincerely,

{Sender Name}