How to Write a Hardship Letter and What to Include

A hardship letter is a formal document explaining significant financial difficulties to a creditor, lender, or other entity. Its purpose is to communicate an unforeseen situation that impacts one’s ability to meet financial obligations and to formally request assistance or a modification of existing terms.

Gathering Necessary Information

Begin by identifying the specific entity and, if possible, the exact department or individual to whom the letter should be addressed, ensuring it reaches the correct recipient within the organization. Next, gather all essential identifying details related to the account or agreement, such as account numbers, loan numbers, policy numbers, or property addresses, to allow the recipient to quickly locate your records.

Clearly define the nature of the specific event or circumstance that caused the financial hardship. This could include a job loss, a significant reduction in income, unexpected medical emergencies, natural disasters, or other major life events beyond your control. Provide specific dates when the hardship began and, if known, its expected duration, detailing how this event directly led to your current financial difficulties.

Quantify the financial impact by outlining lost income, unexpected expenses, or the specific amounts you are now unable to pay. For instance, specify a reduction in monthly income or the total cost of unforeseen medical bills.

Collect supporting documentation that can corroborate your claims, such as layoff notices, wage statements showing reduced hours, bank statements illustrating changes in income and expenses, medical bills, or police reports for property damage. These documents provide factual evidence for your situation. Finally, clearly define the specific outcome you are seeking from the letter, such as a payment deferral for a set period, a reduced interest rate, a modified payment plan, or a temporary reduction in payments.

Organizing Your Letter

Begin with your contact information, including your name, address, phone number, and email, followed by the date the letter is written. Below that, include the recipient’s name, title, company, and address, ensuring the letter is directed to the appropriate party. A formal salutation, such as “Dear [Recipient’s Name],” precedes the body of the letter.

The initial paragraph should clearly state the purpose of your letter and reference the specific account or loan number involved. Subsequent body paragraphs should be dedicated to specific aspects of your situation. One paragraph should detail the specific event that caused the hardship, explaining what happened and when. A separate paragraph should articulate the financial impact, providing details on how the hardship has affected your ability to meet your obligations, such as a loss of income or increased expenses.

The letter should then clearly state your requested resolution, outlining the specific assistance or modification you are seeking. A closing paragraph should express gratitude for the recipient’s consideration and offer to provide any further information or documentation required. If including supporting documents, mention them within the letter and specify that they are attached. Conclude with a professional closing, such as “Sincerely,” followed by your handwritten signature and your typed name.

Writing the Content

Crafting the content of your hardship letter requires a professional, respectful, and honest tone. Avoid overly emotional language, blame, or aggressive demands, as a calm and factual presentation is more effective for financial negotiations. Utilize clear, straightforward language, avoiding complex financial jargon or overly long sentences to ensure your message is easily understood by the recipient.

While providing sufficient detail for comprehension, avoid including excessive personal information that is not directly relevant to your financial situation. Propose a solution that is realistic and specific to your circumstances, such as a temporary payment reduction for a defined period or a specific interest rate adjustment. This demonstrates that you have considered viable options. Express your willingness to work collaboratively towards a resolution and commit to any agreed-upon terms. Before sending, meticulously review the letter for clarity, grammatical errors, and spelling mistakes, as a polished document reflects your professionalism and seriousness in addressing the situation.