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?