When life takes a turn and you find yourself unable to meet your financial obligations, a financial hardship letter can be your first step toward relief. Whether you’re behind on mortgage payments, dealing with high medical bills, or struggling to make regular payments due to unexpected circumstances, knowing how to write a hardship letter can help you get back on track.
A financial hardship letter is a short document that explains why you’re struggling financially and asks for support like reduced payments, a loan modification, or financial assistance. Lenders often request this letter when borrowers seek help due to job loss, medical emergencies, or other financial challenges. Your goal is to offer specifics while keeping the letter short and to the point.
Let’s walk through how to write a hardship letter, what to include, and how this one-page document can make a big difference in your financial situation.
Financial hardship happens when you can no longer meet your debt payments or monthly mortgage payments due to reasons beyond your control. These reasons can include:
A financial hardship letter helps you explain these issues to your mortgage lender or creditor. It serves as a request for support like a payment plan, a lower rate, or a temporary reduction in payment amount.
The goal is to be honest and clear about your current financial situation, so the lender can consider a mutually beneficial solution.
Read more from Freddie Mac: Understanding options to stay in your home
When you sit down to write a hardship letter, don’t get overwhelmed. You don’t have to share your full backstory or include unnecessary details. Instead, keep it focused on the following key parts:
Start with your name, address, phone number, and email. This ensures the letter has all necessary information upfront.
Mention the account number of the loan or mortgage. This helps the lender match your request to the right file.
Describe what caused the financial hardship. Be honest, but don’t go into too much detail. One paragraph explaining the hardship is enough.
Example:
“We lost our household’s main source of income when I was laid off in March. Since then, we have been relying on a reduced income and have fallen behind on our mortgage payments.”
State the date the hardship began, how it impacted your ability to pay, and whether it’s a temporary or permanent issue. If your situation has improved, share that too.
Example:
“We expect to return to full-time employment within the next six months. In the meantime, we are requesting a temporary reduction in monthly payments.”
Let your creditor know what kind of help you need—this could include financial assistance, reduced payments, or a loan modification.
Example:
“We are requesting a loan modification to reduce our payments or lower our interest rate so we can stay in our home.”
Show that you’re serious about resolving your debt. Offer a practical solution and describe what steps you’re taking to avoid missing future payments.
When writing a hardship letter, follow these helpful drafting tips:
Learn more from Experian: How to Write a Hardship Letter to Creditors
If you’re unsure how to write a hardship letter or if you’re overwhelmed by your debt, credit counselors can help. These professionals work with borrowers to assess their current financial situation and help create a plan that includes realistic solutions, like negotiating with creditors or building a monthly budget.
Working with certified credit and housing counselors through a nonprofit organization is a good way to get reliable support. They can guide you through the process of applying for assistance, adjusting your monthly payments, or seeking a modification. If you’re experiencing technical difficulties while dealing with your creditors, they can also help you contact technical support or ensure you include integrated notes in your documentation.
You don’t have to go through financial hardship alone. Help is available, and taking the time to write a financial hardship letter is a smart move toward regaining control over your finances.
Here is a free financial hardship letter sample you can use. Customize your contact information, a summary of your financial hardship, and a clear request for assistance.
Name: (Your Name)
Address: (Your Address)
Email: (Your Email Address)
Phone Number: (Your Phone Number)
To Whom It May Concern:
I am writing this letter to explain the 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 short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home, and we would really appreciate the opportunity to do that.
The main reason that caused us to be late is (insert reason here). Soon after being late and our income not being nearly enough, we had fallen further behind. Now, we cannot afford to pay what is owed to (lender). It is our full intention to pay what we owe. But at this time, we have exhausted our income and resources, so we are turning to you for help.
(The approximate date of hardship and whether we believe it is temporary or permanent.)
Our situation has improved because (reason here), and we feel that a loan modification would benefit us both. We would appreciate it if you could work with us to lower the delinquent amount owed or adjust our payment so we can keep our home.
We truly hope that you will consider working with us and we are eager to get this resolved.
Sincerely and Respectfully,
Borrower’s Signature Date
Co-Borrower’s Signature Date
Use the sample letter above as your guide, but be sure to personalize your version. Include:
Keep the letter concise and focused. Avoid emotional language or too many details. Lenders want a clear and honest explanation that helps them offer a mutually beneficial solution.
Learn More: Writing a Good Hardship Letter
Mention your income, missed or late payments, and whether you’re requesting a temporary reduction or longer-term loan modification. If you’re experiencing technical difficulties with your payments, include that too—but keep it brief.
Use phrases like:
Make sure your lender has all the necessary information to evaluate your situation.
If you need help writing or submitting your financial hardship letter, contact a nonprofit credit counseling agency like Credit.org. Our counselors can guide you through the process, help maintain notes for your file, and develop a realistic payment plan.
If you’ve received a letter notifying you of missed payments, don’t wait. A hardship letter can help you avoid foreclosure and protect your financial future.
If you need any help negotiating with your lender or understanding your situation, call us today for Foreclosure Assistance.
