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How to Write a Financial Hardship Letter

Gabriel Traverso
LoanBiz Columnist

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Article Rating , 3 out of 5 based on 3 votes

In the battle to repair your credit or save your home from foreclosure, a well-written hardship letter can mean the difference between being forgiven or being finished.

A creditor hardship letter is required by most lenders if you want to be given another chance after you fall behind on your mortgage. The ultimate goal of the hardship letter is to provide a reasonable explanation for the financial hardship in which you find yourself and explain why it makes sense for the lender to extend a "workout" opportunity to you. By illustrating that you have a legitimate excuse for your financial difficulties you may be able to avoid foreclosure or bankruptcy.

Your Hardship Letter Must Send the Right Message

Specify very clearly in your financial hardship letter what circumstances have forced you into delinquency with your creditor. Include the date the difficulty began, if / when it was resolved, and what you will be able to repay each month. Provide a brief account of your situation and if you want to keep your home you must reiterate that you can now make your payments. If a lender believes that you created your own problems, or that granting a workout will just prolong the inevitable, you are unlikely to get another chance.

Find a Sample Hardship Letter Online To Get Started

If you still need help assembling your financial hardship letter, many sample letters can be found on the Internet. These sample hardship letters provide examples of correct verbiage, format, and content. You may also be able to request a sample hardship letter directly from your creditor.

The importance of the creditor hardship letter is often overlooked and can drastically impact your ability to keep your home from foreclosure. Remember, it is always best to communicate early, often, and clearly with your lender. Too much communication is never a bad thing!

About the Author
Gabriel Traverso is a freelance writer, professional musician, and artist. He resides with his family in Reno, NV.

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