When life veers off plan and the bills stop lining up, a financial hardship letter is often the first thing a lender will ask for. If you are behind on mortgage payments, facing heavy medical expenses, or struggling after an unexpected disruption, a clear, honest letter can open the door to options you may not realize are available.
At its core, a financial hardship letter explains what changed and why you cannot meet your obligations right now. It is usually brief and focused, outlining the situation and requesting help such as temporary payment relief, a loan modification, or other forms of assistance. Lenders rely on this letter when reviewing requests tied to job loss, illness, or similar setbacks, so clarity matters more than length.
Below, we break down how to write a hardship letter, what information actually helps your case, and why this single page can carry more weight than most borrowers expect.
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 start drafting a hardship letter, resist the urge to overexplain. Lenders are not looking for a full life story, and more detail does not usually strengthen your case. What matters is that the letter is easy to follow and clearly ties your request to a real financial disruption.
Include your name and current contact details, such as your address, phone number, and email. This sounds obvious, but missing information can slow things down or derail the review entirely.
List the account number tied to the loan or mortgage you are asking about. Without it, your letter may never reach the right file.
Briefly explain what caused the financial strain. One solid paragraph is enough. Be direct and factual, without padding the explanation or dramatizing the situation.
Example:
“We lost our household’s primary source of income after a layoff in March. Since then, our income has been reduced, and we have fallen behind on our mortgage payments.”
Clarify when the hardship began, how it affected your ability to pay, and whether the issue is temporary or ongoing. If there are signs of improvement, it helps to mention them.
Example:
“We expect to return to full-time employment within the next six months and are requesting a temporary reduction in monthly payments during this period.”
State plainly what kind of assistance you are asking for. This might be reduced payments, a loan modification, or another form of relief tied to your situation.
Example:
“We are requesting a loan modification that would lower our monthly payment or adjust the interest rate so we can remain in our home.”
Show that you are taking responsibility and thinking ahead. Briefly explain what you are doing now to stabilize your finances and prevent future missed payments.
A few practical guidelines can make the letter more effective:
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.
Below is a free financial hardship letter sample you can use as a starting point. Replace the contact details, describe your specific hardship, and clearly state the type of assistance you are requesting.
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
Templates and AI writing tools can be useful when you are staring at a blank page, but they should never replace your own voice. A hardship letter is a standard document, yet lenders are looking for a real explanation of how unexpected circumstances affected your financial obligations, not polished language that reads like it came from a script.
Using a template word for word, or letting an LLM write the letter for you, often backfires. Generic phrasing can signal that the letter does not reflect your full picture, which makes it easier for a creditor to dismiss the request for financial assistance. Credibility and authenticity are more important than perfectly written language. This is especially true when you are asking for relief tied to outstanding debt, late fees, a lower interest rate, or a request to temporarily pause payments.
If you use an AI tool at all, treat it as support, not a substitute. You might use it to organize your thoughts, check clarity, or trim unnecessary details so the letter stays short. You can also ask for drafting tips, help spotting unclear sentences, or confirmation that you included all the necessary information. Do not ask it to invent facts, rewrite your situation in generic terms, or replace your language with something smoother but less honest.
Credit counselors often see hardship letters rejected because they feel templated or incomplete. In practice, counselors maintain notes and maintained checklists to ensure letters explain what changed, how money flow was affected, and what relief is being requested, whether that is a longer loan term or another option allowed under practical law bankruptcy or loss mitigation rules. Those internal processes exist to preserve important explanations, not to strip away the borrower’s voice.
Your letter should sound like you. It should explain what happened, without a full backstory, and connect those events to missed payments or lender notifying you about defaults.
Authenticity matters more than style, and a plain, sincere explanation is usually more effective than something that looks professionally generated.
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
Include the numbers that matter, such as your current income, any missed or late payments, and whether you are asking for short-term relief or a longer-term loan modification. If payment issues were caused by technical problems or servicing errors, note that as well, but do not linger on it.
You can frame requests simply, using language like:
The goal is to give your lender enough information to review your request without forcing them to guess or follow up for basics.
If you are unsure how to word your hardship letter or how to submit it properly, a nonprofit credit counseling agency like Credit.org can help. Counselors can walk you through the process, document your situation, and help you think through a payment plan that actually fits your finances.
If you have already received notices about missed payments, time matters. A hardship letter is often one of the tools that can help you avoid foreclosure and limit long-term damage.
For help understanding your options or communicating with your lender, reach out for Foreclosure Assistance.
