Sample Hardship Letters

Sample Hardship Letter Disclosures

Please note that we provide this information as a general guideline.  It is Not legal advice.  Sometimes the laws change so we cannot promise that this information is always up-to-date and correct.  By providing this information, we are not acting as your lawyer or in any way, shape or form providing legal advice.  Always consult a lawyer, if you can, before taking legal action.

A first step is to send the bank and or loan servicing company a “hardship” letter. While it is best to get the help of a legal advocate first, you may not have enough time. It is better to try this on your own than to do nothing. Send all letters by certified mail and keep the receipt.

Caution:  The letter provided is for illustration only; you must compose your own letter; this is only to show you what one might look like.

Tips on drafting a “hardship” letter.

1. Show that you have had an involuntary reduction in income or an unavoidable increase in expenses.

 Examples of involuntary reductions of income:

  • Lay-off
  • Reduction of hours or wages
  • Forced to take a lesser paying job after a lay-off
  • Death of a borrower
  • Bad self-employment year
  • Permanent or short-term disability
  • Serious illness of a household member
  • Divorce (Some lender may not accept divorce as a hardship)

Examples of unavoidable increase in expenses:

  • Uninsured major medical expenses
  • Natural disaster
  • Unanticipated urgent property repairs
  • Unavoidable child care expenses
  • Increase in property taxes
  • Increase in the adjustable interest rate

2. Include all the following in your letter:

  • Your name, address, phone, account number
  • If you have a credit counselor and attorney include contact information for them too.
  • Describe what caused you to fall behind in your payments and any other “hardship” circumstances. Lenders want to see that you want to pay them back, but circumstances were beyond your control.
  • State the type of work-out plan you are seeking.
  • Specify how much you can pay per month and how soon you can start.
  • If you have money saved, tell the lender you will pay them some or all of it as part of a work-out plan.

Include a detailed budget and your plan for making payments in the future. Be realistic.

Sample Hardship Letters

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Tim Huie
Tim Huie
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