A hardship letter, also known as a letter of hardship, is a personal letter written by an individual to a creditor, lender, landlord, or other entity to explain financial difficulties they are experiencing and to request specific relief, accommodation, or alternative arrangements. Such letters are commonly used when someone cannot meet their financial obligations due to unforeseen circumstances or events outside of their control.
The primary goal of a hardship letter is to provide a clear explanation of the reasons behind the financial difficulties and to express a willingness to find a resolution.
Recipient's Information: The name and address of the creditor, lender, or entity to whom the letter is being addressed.
Your Information: Your full name, address, account number, or other identifying details.
Date: The date when the letter is written.
Subject: A brief reference to the purpose of the letter, such as "Request for Loan Modification Due to Financial Hardship."
Explanation of Hardship: A detailed account of the circumstances causing the financial hardship. This can include events like job loss, significant medical expenses, a family emergency, a natural disaster, or other unexpected financial burdens.
Timeframe: An indication of whether the hardship is temporary or permanent can be important. For example, if you lost a job but have prospects for a new one, mentioning the expected duration of the hardship might be beneficial.
Previous Efforts: If applicable, describe any steps you've taken to address the hardship on your own, such as reducing expenses or seeking additional sources of income.
Request for Assistance: Clearly outline the type of assistance or accommodation you're seeking. This might include requests like loan modification, deferred payments, reduced interest rates, or a repayment plan.
Plan of Action: Describe your plan to get back on track once the hardship is over or alleviated. This shows the recipient that you're proactive and committed to fulfilling your obligations in the long run.
Supporting Documentation: While not part of the letter itself, it's often beneficial to include or refer to any relevant documents that can validate or support your claims of hardship, such as medical bills, layoff notices, or other pertinent records.
Gratitude and Openness: Express gratitude for the recipient's time and consideration and indicate your willingness to discuss the matter further or provide additional information if needed.
Signature: Sign the letter at the end.
Before sending a hardship letter, it's crucial to ensure its content is honest and accurate. Overstating the hardship or providing false information can lead to more significant problems in the future. If unsure about how to frame the request or situation, individuals might consider seeking guidance from financial counselors, legal professionals, or other experts familiar with such matters.