Writing A Hardship Letter Breaking Lease

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If you have signed a lease on a property, you will be contractually obliged to remain in that property for a set period of time. However, situations may change and they may force you to to break the lease. A situation of financial hardship may be accepted for this, although you will have to write a formal letter to your landlord.

Some Basic Guidelines in Writing the Hardship Letter

The said hardship letter is a formal business letter. This means it must be properly formatted and addressed. It must also not contain any grammar or spelling errors. The letter has to be factual, short, and to the point.

Indicate who you are and which unit you currently lease. Explain when your lease started, and state that there has been a significant change in your financial situation, which is forcing you to break your lease. State that you hope the landlord will agree to breaking the lease without charging you a monetary penalty for doing so.

Explain How Your Situation Has Changed

Discuss that particular change in your financial situation that is causing you to break your lease. Some commonly accepted reasons are divorce or separation, a failing business, death in the family, and sudden illness or disability. Specify your reasons and provide evidence through documents. Elucidate on how this situation has impacted your financially where you are no longer able to pay for the lease payments. Provide copies of your other bills as evidence of this.

Make a Goodwill Gesture

In order to appease your landlord, you may want to make a goodwill gesture. For instance, you can offer to help in finding a new tenant by advertising through your social media accounts. You could also suggest, if that is the case, that you already know someone who would be happy to sublet the property until the end of your lease arrangement. Subletting is usually not accepted under a lease arrangement, however, so make it clear that you have not set this in motion yet, but that you feel it could be a good opportunity to resolve the situation.

Should subletting not be an option for you or for your landlord, then you may need to request that the penalty associated with breaking the lease be waived. The nature of this penalty is detailed in your original lease arrangement. It is usually a number of months’ rent, which means that it can be quite substantial. You may need to explain, therefore, that the situation you are in has been completely unexpected and has already caused you some financially hardship, and that having to pay such a huge penalty would be impossible for you.

Ending the Letter

In ending the letter, make sure that your landlord understands that your situation is beyond your control, and that you are willing to resolve it in the best way possible. Remember to keep photocopies of your letter and that you send it by registered post. Do also follow up with your landlord if there has been no reply within one week.

Hardship Letter Breaking Lease Example

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

{Date}

To Whom It May Concern:

I am the tenant living in {rental unit} at {address}. I have been residing there since {month, date}. I am writing because my financial situation has changed in recent weeks. I need to break my lease early, and I am hoping I can do so without monetary penalty.

My income has become significantly 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.} and so I do not have enough left over to pay for rent.

I am happy to help advertise my apartment for another tenant, or to look for someone to sublet the unit until my lease is up. Since subletting is restricted in the tenant handbook, I wanted to check in with you on the proper procedure before taking that approach.

If subletting is not an option, I hope that there is a way that you can reduce or forgive the penalty for breaking the lease early. I am not trying to avoid my responsibilities, but these new circumstances have been both unexpected and financially devastating.

I apologize for any inconvenience this causes you and I look forward to speaking with you soon.

Sincerely,

{Sender Name}

Writing A Hardship Letter Auto Loan

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A hardship letter auto loan has to be properly written to maximize its chances of being successful. This means that it has to be formatted the right way, and that it includes the correct information. This will greatly increase the chances of the request being granted. The letter is a formal letter in which a creditor is requested by the letter writer to help financially by changing the terms and conditions of the loan. Some lenders have specific forms for this, which you should complete as well as sending the letter.

What to Include in Your Hardship Letter

In hardship letters, you have to clearly explain what is happening, without becoming emotive. It is about presenting the facts, rather than laying on the waterworks. Tell your lender if your income has been reduced, if you have lost your job, or if you have had unexpected expenses due to medical bills. Tell the lender what you have done to try and keep up with your bills, such as taking on a part time job or giving up on a gym membership. Do not tell your lender how all of that has made you feel, however, because that is irrelevant.

Key Tips in Writing a Hardship Letter Auto Loan

Naturally, you must make sure that the letter is addressed to the right person and that it is written in the right language, and is free from grammatical and spelling errors. Some key tips are mentioned below.

  1. Make sure that your letter is one page only.
  2. Include succinct, objective, and clear facts only.
  3. State that you wish to resolve the debt.
  4. Include all relevant documentation that proves your hardship and your efforts to turn it around.
  5. Thank your creditor for taking the time to read your letter and considering your request.

Things to Avoid When Writing a Hardship Letter Auto Loan

  1. Making your situation sound more dramatic than it is, or otherwise exaggerating your hardship.
  2. Lying or including any false claims, even if you believe they cannot be checked.
  3. Promising things that you cannot guarantee, such as catching up with missed payments by a certain date.
  4. Blaming your lender for the difficulty that you are now in.
  5. Writing an ultimatum, such as stating that you will claim bankruptcy if they don’t help you.

Remember that when the auto loan was provided to you, it was on the basis that you could afford it under your circumstances at that time. Whatever circumstances that have caused you to be in hardship right now, are not the fault of the lender. In fact, if at all possible, you should avoid placing blame at all. Do not use the word “because” in the hardship letter too often, in other words.

A final thing to remember is that you have to make sure that you take a photocopy of everything that you send to them, and that you use registered mail with receipt. Do also follow up after a week, to make sure that your letter has been received.

Auto Loan Hardship Letter Example

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

{Date}

To Whom It May Concern:

I am writing this letter because I am no longer able to meet the monthly payment for my car loan. I have currently paid {amount} of {total}. I am due to pay {amount} for the next {number} months. I cannot pay that amount, but I could pay {amount} over the next {number} months instead.

I am unable to make my payments on time because of a sudden financial crisis. In the last few weeks I have had to cope with {job loss, family member death, be specific}. I am working hard to get back on my feet, but if I am unable to reduce or extend my payment period then I will have to file for bankruptcy, which I am hoping to avoid.

I need my car for {job purposes} and am hoping to avoid repossession. I am attaching my financial documents such as {documents}, which should indicate the suddenness and seriousness of my situation.

I look forward to hearing from you soon so that we can work out an acceptable payment plan for the future.

Sincerely,

{Sender Name}

Qualified Written Request

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Sample Hardship Letter : To perform the most comprehensive forensic loan audit you should compile all of the loan documents you maintain and get all of the loan documents your lender maintains. A Qualified Written Request (QWR) is a written demand to your servicing company. After receiving a QWR, the servicing company has twenty days to respond to the request and forward a copy of all loan documentation on file. The servicing companies also have to suspend all reporting activity to the major credit bureaus and then resolve the issue within sixty days. Federal RESPA laws require the servicing companies to comply and respond within this specified time frame. A QWR will be generated by you and submitted to the servicer for every file prior to the completion of the forensic loan document audit.

Sample Hardship Letter

American Home Mortgage Services, Inc

Attention: Correspondence Dept.

Re: Loan Number: 1234511722

Name : Johnathan Jones

Subject Address : 12345 Erehwon Street, Heartland, OH 12345

To Whom It May Concern: Please accept this letter as a “Qualified Written Request” under Section 6 of the Real Estate Settlement Procedures Act (RESPA) to obtain copies of ALL documents pertaining to the origination of the above mentioned Clients’ current mortgage on the referenced subject property. Please see below for a list of documents needed.

Initial Loan Application and Final Loan Application

Executed Notice of Right to Cancel (if refinance)

Deed of Trust/All Riders

Note and All Addendums/Riders

Truth-in Lending Statements

Itemization of Amount Financed

Good Faith Estimates

Estimated and Final Closing Statements (HUD)

Appraisal

Title Report

Grant Deed(s)

Copy of Loan Payment History – This must include all payments made, all fees incurred, any and all escrow account disbursements and how payments were appliedIn addition to the above, please forward any and all disclosures, rate sheets etc. associated with the above transaction. Please note that all copies need to be clear and legible and all documents should be copied in their entirety.

In closing, We/I understand that under Section 6 of RESPA you are required to acknowledge our/my request within 20 business days and try to resolve any issues within 60 business days.

Please forward requested documentation as soon as possible and we look forward to working with you on a solution that benefits our mutual concerns. Thank you for your time.

Sincerely,

Communicating a Hardship Effectively

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Effective communication is the single most important aspect of describing hardship issues in your hardship letter. Many modification requests fail because the homeowners can not tell their story in a simple way. It is easy to forget there is a real human being analyzing the hardship letter within the lender’s or servicer’s loss mitigation department who is responsible for determining the existence of a real hardship. With that said you must keep your hardship letter simple and get to the point quickly.

Loss mitigation departments are overwhelmed with foreclosures, short sales, and modification requests. They do not want to read a ten page letter regarding the loan officer who put them in the loan, why they bought the house, the memories they have had there and why they want to keep their home. When writing the hardship letter, keep the letter simple and to the point. In addition, handwrite the hardship letter. The fact is that people personally relate to handwriting more than a typewritten letter and this includes the lender’s or servicer’s loss mitigators. What follows on the next pages are perfect examples of sample hardship letters, a financial worksheet, an income and expense worksheet, a sample loan modification request and a sample stacking order for you to use. Notice as well that on the loan modification request and on the sample stacking order for a loan modification you will need to include documentation of your home’s value. You can obtain reliable documentation of your home’s value from a local Realtor, Title Company or from an appraiser.

How to Determine if You are a Candidate for a Loan Modification

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Lenders and servicers will, in general, look for one thing when you submit a modification request. They look for a documentable hardship of course, but at the end of the day if they decide to grant your request for a loan modification all they really want to know is if you can afford the new payment(s). This is the big secret behind getting a loan modification approved. There is, however, an art to making loan modifications work. You must disqualify yourself from your old payments and at the same time qualify yourself on a new payment structure. It sounds complicated and it is at first but you will quickly learn important strategies for effectively processing loan modifications. To understand what the lender or servicer considers qualified, you have to know how lenders calculate your income. The income you can use to qualify for a modification is different from traditional income calculations used to qualify for traditional loans. Moreover, the difference in the qualification guidelines is typically in your favor.

For a modification, you can qualify based on your documentable total household income. As such, you can count income from almost any source: Grandma’s SSI, income from child day care services, from a second job paid under the table, etc. so long as it can be proved. Proof must be in the form of bank statements, 1099’s or in some other documentable form as outlined in the submission paperwork you will provide the lender. In addition, if only one of two spouses was on the original loan, the other spouse’s income can count so long as it is documentable.

Once you calculate all documentable monthly income from all household sources you then have what you can present to the lender as the new qualifying income. To calculate a qualifying monthly mortgage payment, use the benchmark fully amortizing 5.00% rate on whatever the new balance might be, counting arrearages if they are added back into the loan. WARNING: this is only for a general qualifying exercise only; do not expect this rate or payment! If the payment at 5.00% is just too high, then you may not be an appropriate candidate for a modification. However, you can still request help with other services such as a deed in lieu of foreclosure, a short sale or postponing as long as possible a notice of trustee’s sale in an effort to help you transition to more affordable housing.

Loan Mod Process

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Sample Hardship Letter : Using the forensic mortgage loan document audit as basis for pressuring lenders, you will move lenders to take immediate action to stop an impending foreclosure and keep your home safe and place yourself in a better financial situation. This audit reveals various federal and state violations or errors in the original loan documents. Our internal auditing statistics show that four out of every five loans we have audited have significant violations.

In the beginning of the process you will need to send your lender a Qualified Written Request (QWR). The QWR is a formal demand that the lender must comply with under federal law to produce copies of your loan documents within a specified timeframe. Once you have collected all of the required documentation from your lender you can proceed to perform a forensic loan audit. Sample Hardship Letter

Once the audit has been completed and if violations are found a formal request for a loan modification is sent to the lender along with an abundance of highly organized financial information that makes the best case possible as to why you (a) deserve a loan modification and (b) can afford the new payments. This is a long process that requires patience and negotiation skill.

Are Hardship Letters Just for Loan Modifications?

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The vast majority of hardship letter sites on the internet are devoted to loan modifications and helping consumers draft hardship letters for them. However, hardship letters are required and can be used for: short sales, credit card debt negotiation, requesting lower interest rates on credit cards and installment loans and a host of other consumer loans.

The reason hardship letters are so effective in recent history is that lenders are having a difficult time keeping their paying clients paying their bills on time. The debt settlement industry is going through an enormous boom at present because of the state of economic affairs in America and all over the world. The moral of the story is that a well crafted hardship letter accomplishes a number of goals:

1.     It puts your lender on notice that they may be losing a great deal of money if they don’t pay attention to you.

2.     It makes your lender understand that you’re not some “run of the mill idiot” that doesn’t care about their finances.

3.     It tells a personal story in a short time frame that loss mitigation agents may connect to personally

4.     If you’re hardship is related to active military deployment or other legally protected statuses, your lender may have to legally come to your assistance.

5.     It establishes a record of correspondence with your lender. This is important if you ever decide to file a lawsuit against your lender.

There are a number of other reasons that hardship letters can help you and they are not all related to loan modifications. If you need a sample hardship letter and you can’t find one on this site then please leave us a comment and we will begin the work of drafting a sample hardship letter that will work for your specific contextures – Just for Loan Modifications?

IRS Penalty Abatement Sample Letter

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It’s no secret that the IRS doesn’t shy away from assessing penalties for every single offense that can be possibly thought up by the human imagination. While the IRS can be ruthless in assessing these penalties, many times, the IRS will not be sticklers about enforcing them. Dare I say they may even be somewhat reasonable about it, given plausible justification of the violation. The only way to know how committed the IRS is to charging you the assessed penalty is to ask them.

This may be easier said than done. You may sit down to pen a beautifully crafted letter and get as far as “Dear IRS” before your writer’s block makes a bold and unashamed appearance. Now what? Should you be forthcoming with details? What types of things are the IRS looking for? Is there a particular department you should be writing to or do you have a case worker you should contact? Do you need a doctor’s note or your hospital records? Do you need pictures of your damaged home from the hurricane or insurance records? Will the IRS be able to use any of your information to assess you further or worse yet, audit you?

Before you sit down to spend your valuable time on a letter to the IRS, take a moment to examine the pertinent details you intend to present to them to determine the feasibility of your request.

Did you file your return or pay your taxes on time and this is an error?

You should request a penalty abatement. Skip ahead to Sample Letter.

 

Were there circumstance outside of your control (i.e. car accident, serious illness, no access to your records, bad tax advice from a professional or the IRS) that prohibited you from filing returns or paying your taxes?

You should request a penalty abatement. Skip ahead to Sample Letter.

Were you too busy to hire someone to do your taxes or do them yourself? Did you expect to owe money to the IRS that you wouldn’t be able to pay so you put off the filing of your returns? Did you simply forget to file your returns?

These are not considered reasonable causes and your chances of obtaining a penalty abatement are slim.

You may have further questions about what the IRS would consider reasonable cause. Do not hesitate to contact a tax professional you trust to discuss these details. An Enrolled Agent is the highest credential the IRS bestows upon tax professionals. Find one that has no complaints and an A+ rating at the Better Business Bureau to further discuss your circumstances.

Below is a sample letter and breakdown of the components of a competent letter to the IRS about abating your penalties.

Sample Letter

 

January 1, 2012

 

 

 

Internal Revenue Service

Penalty Abatement Coordinator

Address

City, State, Zip

 

Re: Penalty Abatement

Ima Taxpayer

Address

City, State, Zip

SSN

Tax Year: 20??

Notice #

 

To Whom It May Concern:

 

I have been assessed a penalty in the amount of $2,345.67 (please refer to enclosed notice # for details).

 

The penalty was assessed for (insert offense here i.e. unfiled taxes, unpaid taxes, etc). I was unable to (insert proper action here i.e. file my returns, pay my taxes on time, etc.) due to (insert reason here i.e. disability, serious illness, etc.).

 

Describe the nature of your hardship here. For example, if you were disabled, include details such as the nature of your disability, the severity of your disability, and the dates of your disability.

 

Explain how your hardship prevented you from the proper action that the IRS is penalizing you for. Explain how other obligations were impaired (i.e. inability to pay other bills, inability to care for your children, etc.)

 

Please find enclosed documents to further explain my (insert hardship here).  The documents to enclose would be doctor’s notes, police reports, death certificate, pictures – anything to help the IRS agent fully understand your inability to file your returns or pay your taxes.

 

In light of the above information, I ask that you consider an abatement of my penalties for reasonable cause. If you have any further questions, I encourage you to contact me directly at (insert phone number here) or (insert email address here).

 

Thank you for your time and consideration. I look forward to your response.

 

Sincerely,

 

Sign your name in ink pen here

 

Type your name here

 

 

 

Other Things To Consider

Do you need to file your returns or pay your back taxes before submitting a request for penalty abatement to the IRS? A hardship isn’t black and white. Would your situation constitute a hardship? How can you tell if the IRS made a mistake on your assessments and therefore you’re due a penalty abatement? It would serve you well to speak with a reputable Enrolled Agent before sitting down at a desk to formulate your written plea to the IRS for a penalty abatement.

Medical Hardship Letter

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Medical hardship letter: this is not Europe, we pay for our medial care in this country. The problem with that is people get left behind, the hardship of paying medial bills can be too much for many when bad things happen. Unfortunately it happens more than we want to admit, that’s where tools like medial hardship letter come in handy.

Medical hardship letter

Name:
Address:
Creditor Name:
Account #:

Re: Medical Bill Financial Hardship

I have come to a point where I am no longer able to make our current monthly payments.

These circumstances mainly came about due to severe illness as I have been diagnosed with a serious illness which according to the doctors, would take long time to heal with necessity of hospitalization for several weeks when different types of investigations and tests have to be taken up on different days under different circumstances before concluding actual ailment that is nagging me. Already, major expenses are being incurred to mitigate the sufferings through injections and oral medications. Prior to that, I worked for a large organization for many years and made a luxurious living including substantially enough to set aside for a nice retirement.

After a few late payments, the interest rates on all the cards had climbed to at or near 30%. I am now hugely in debt and sinking fast. In 20xx, I returned to the workplace full-time but expected earnings did not materialize and I have been falling behind my schedule. I am now considering debt management or debt consolidation however at this time, I am making similar arrangements and negotiations with my other creditors to avoid having to file for personal bankruptcy. I want to pay my debts but I just cannot see how to do that and keep my home and pay all my creditors. I hope you can see my predicament and offer a reasonable repayment plan.

Yours sincerely,

(Your Signature)
(Your Name)
(Your Address)
(Your Account #)

Car Loan Hardship Letter

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This is a post is for Denise Cox who commented on the how to write your own hardship letter page of this site. In the turmoil of the mortgage crisis its not just homes being foreclosed on but also peoples vehicles. Many of whom require it for their very livelihood, so this auto hardship letter is for you Denise… good luck.

Intro (lead your letter with your basic information for an easy read for who is processing your paperwork including; your name, address, lender name, and account number)

To Whom It May Concern:

I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen behind and would like you to consider working with us to make sure you are paid in full.

The main reason that caused us to be late is …. (insert reason here and don’t be too lengthy and long winded) … We had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed to …(lender goes here). It is our full intention to pay what we owe. However at this time we have exhausted all of our income and resources so we are turning to you for help.

(The approximate date of hardship and we believe that our situation is Temporary or will be Permanent.)

Our situation has got better because… (explain how things have gotten better or going to, you’ll have to sell them on it)

We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.

Sincerely and Respectfully,

Borrower’s Signature
Date
Co-Borrower’s Signature
Date