Writing A Lower Payments Hardship Letter

There are numerous bills that you have to pay monthly or regularly. Generally speaking, these bills, such as credit card bills, rent, or utility bills, are paid at regular intervals. If you find yourself in a position of financial hardship, which means that you are unable to make some of those monthly payments, you may find that you have to write a lower payments hardship letter.

What Can the Letter Be Used For?

In most cases, a lower payments hardship letter is written for a line of credit where some sort of interest is paid. That is because all other types of bills, such as rent, utilities, or cellphones, are paid for a service. A reduction in monthly payments on those, therefore, would also result in a reduction of usage. However, on bills such as loans, car finance, mortgages, or credit cards, you could lower payments made on interest, but still make payments overall.

Write a Lower Payments Hardship Letter Formally

You must write this type of letter formally. It should be addressed to the right person in the right department, and that it should be formatted properly. It must include your personal details and your account details as well. You should also make sure that the letter is free from spelling and grammatical errors.

Describe Your Financial Hardship

Next, write a description of the financial hardship you are experiencing. The creditor is not interested in sob stories, however, so only put in the facts. Explain why you are in hardship and the impact this has had on your ability to pay your bills. Provide documented evidence (pay slips, termination notices, bills, etc…) of your financial situation.

Indicate Your Request Clearly

You should make your request as clear as possible. Indicate that you currently make quarterly/monthly/weekly payments on a certain account, and do tell the creditor that you have been unable to make payments for a certain period of time if that is the case. A word of warning: the longer you wait in writing this type of letter, the less likely it will be that your request for lower payments will be granted. Hence, write it as soon as possible.

When you make your proposal, do not simply ask your creditor for lower payments, as they do not know what you can and can’t afford. Rather, you should be concise and tell them exactly what you are proposing. Do not make promises you can’t keep, however. Creditors would rather wait longer for their money but know they are getting it, rather than expect a shorter period of time but payments are not actually made.

Honesty and openness go a long way. Remember that the creditors are interested only in how they will get back their money. If you have not made any payments for a long period of time, they are likely to have already started legal action against you. Hence, do not bury your head in the sand, but address the problem as soon as it starts to arise.

Lower Payments Hardship Letter Example

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

{Date}

Dear {creditor}:

I am writing to request lower {weekly/monthly/quarterly} payments on {debt}.

Your records should indicate that I {have/have not} kept up with the required payments of {amount}. But now, due to {situation}, I can no longer afford that amount. {Describe financial/life conditions}.

I would like to propose lower {weekly/monthly/quarterly} payments of {amount}. I know this will extend the length of the loan that was offered to me, but the only alternative would be {default/bankruptcy/etc.}.

Please let me know if this arrangement works for you and I will immediately send the adjusted payment amount.

Appreciatively,

{Sender Name}

For more sample hardship letters, click here.