Falling behind on bills can feel like you’re drowning with no way out. Whether it’s due to a job loss, financial scam, medical emergency, or unexpected expenses, financial hardship can hit anyone—and when it does, it can be tough to know what steps to take.

One powerful tool that can help is a hardship letter. This simple yet effective document allows you to explain your situation to lenders or creditors and request financial relief, such as reduced payments, personal loan modifications, or temporary assistance.

In this blog, we’ll walk you through everything you need to know about writing a hardship letter—and to make things even easier, we’ve included a free sample to help you get started.

Let’s dive in and take that first step toward financial relief.

Table of contents:

• What Is a Hardship Letter?
• Financial Hardship Letter Template + Free Sample
• How to Write a Hardship Letter: 8 Tips
• What Is Considered Financial Hardship?
• How to Get Through Financial Hardship

What Is a Hardship Letter?

A financial hardship letter is a correspondence you send to a creditor that explains why your current financial situation prevents you from making debt payments. After providing details about your hardship, such as the cause and timeline, request that the creditor provide a mutually beneficial solution. 

Depending on your specific circumstances, you could ask your lender that they assist you by: 

• Suspending your monthly payments for a determined time 
• Decreasing your payment amount
• Lowering your interest rate 
• Pardoning overdue payments 
• Waiving penalties for late payments 
• Adjusting the terms of your loan 
• Settling your debt for an amount less than you owe

For example, if you were recently injured due to an accident, you could ask the creditor to temporarily pause your payments until you recover.

Financial Hardship Letter Example + Free Template

Below is an example of how to write a hardship letter to help you get started. When using the template, make sure to enter your own information where there is bolded text. 

[Your name]
[Your address]
[Your email]
[Your phone number]
[Today’s date]
[Lender’s name]
[Lender’s address]
Re: [Account number]

Dear [Lender’s name]:

I am writing this letter to request assistance with my [type of loan] during a time of financial hardship.

Approximately [amount of time] ago, I [explanation of financial hardship]. As a result, I have been unable to continue making regular payments on my loan. I have included [documentation] that proves the validity of my hardship.

While I have taken steps to increase my income during this time, such as [steps you’ve taken to improve your situation], I am still not able to make full payments. I fully intend to pay off my loan and am requesting your help to get me back on track. I would like to discuss possible solutions such as temporarily suspending payments, lowering my interest rate, or any other loan modification you might suggest. I expect my hardship to be resolved in approximately [length of time], after which I can resume my regular payments.

I want to reiterate my intention to fulfill my financial obligation. If you have any questions or would like to discuss a solution, please contact me at [your phone number] or email me at [your email address].

Thank you for taking the time to review my request, and I hope we can come to a mutually beneficial agreement. Your support during this time of financial hardship is greatly appreciated.

Sincerely,

[Your name]

How to Write a Hardship Letter: 8 Tips

When writing a financial hardship letter, it’s essential to be clear, concise, and respectful while providing all the necessary information. To help guide you through the process, here are eight actionable tips to ensure your letter is effective and increases your chances of receiving the assistance you need.

1. Start With a Clear and Concise Introduction

Begin your hardship letter by briefly stating who you are and the purpose of the letter. Make it clear that you're writing to request financial assistance due to your current hardship. This sets the tone and provides context for your situation.

Example: "I am writing to request a temporary loan modification for my mortgage account due to a recent job loss."

2. Explain Your Financial Hardship Honestly

Provide a straightforward and truthful explanation of why you’re facing financial difficulties. Whether it’s due to a job loss, illness, or other reasons, be transparent about your situation to help the reader understand your need for assistance.

Example: "Due to unexpected medical bills and being out of work for the past two months, I’ve been unable to make my mortgage payments."

3. Provide Specific Details and Timeline

Describe the timeline of events that led to your hardship. Offering specific dates and facts can help lend credibility to your story and allow the lender or creditor to see the progression of your situation.

Example: "I lost my job on March 15, 2024, and have been actively seeking employment since then but have not yet secured stable work."

4. Highlight Steps You’ve Taken to Improve Your Situation

Lenders or creditors will appreciate seeing that you’re actively working toward resolving your situation. Mention any actions you’ve taken, such as seeking a new job, cutting back on expenses, or reaching out for financial advice.

Example: "I’ve cut back on non-essential spending and have applied for several job openings, including part-time work to cover living expenses."

5. Clearly State Your Request for Assistance

Be specific about what you are asking for. Whether you’re seeking a loan modification, payment deferral, or reduced interest rates, make your request clear. This helps the recipient understand exactly what you’re hoping to achieve.

Example: "I am requesting a temporary reduction in my monthly mortgage payments for the next six months while I work to secure employment."

6. Attach Supporting Documents

Supporting documents such as income statements, medical bills, or termination letters can strengthen your request. Attach any relevant paperwork that can help illustrate your situation and provide evidence for your claims.

Example: "Attached, you will find a copy of my job termination letter, recent bank statements, and proof of unemployment benefits."

7. Keep Your Tone Respectful and Professional

Even if you’re feeling stressed or frustrated, maintain a respectful and professional tone in your letter. Avoid sounding entitled or emotional. Being polite and professional increases your chances of a positive response.

Example: "I appreciate your time and consideration in reviewing my request, and I look forward to working together to find a solution."

8. Proofread and Keep It Brief

Before sending your hardship letter, carefully proofread it to ensure there are no errors. Keep the letter concise and to the point, focusing on the key facts without over-explaining or adding unnecessary details.

Example: "Please find my application for temporary financial assistance enclosed. I would appreciate your prompt response."

Financial Hardship Meaning 

Financial hardship refers to a situation where an individual or household is unable to meet their financial obligations due to unexpected circumstances or challenges. 

Examples of financial hardships include, but are not limited to, the following: 

• Employment layoff
• Pay cut
• Home foreclosure
• Decreased number of working hours
• Job relocation 
• Natural disaster
• Emergency event
• Divorce or separation 
• Military deployment or transfer
• Death of a spouse or family member
• Incarceration
• Serious injury or illness

As you can see, the examples above are out of your control. On the other hand, circumstances that creditors are not likely to deem as a financial hardship include: 

• Poor money management or overspending 
• Routine expenses
• Voluntary employment shift 
• Purchase of a home
• Decrease in property value
• Payment of college tuition
• Investment losses

How to Get Through Financial Hardship

In addition to writing a hardship letter, here are some other tips to help you get through times difficult times and continue to reach your financial goals: 

• Create a budget: Use a monthly budget template to write down your monthly income, expenses, and debt to paint a full picture of your current financial situation. 
• Consider debt consolidation: If you have many different debts, debt consolidation can simplify your finances and help you pay your balance quicker and at a lower interest rate. 
• Limit unnecessary expenses: During difficult times, it’s important to only spend money on the essentials. Consider canceling subscriptions, reducing electricity use, and eating at home to save money.
• Start a side hustle: Having multiple income streams can help mitigate financial burdens. Examples of side hustles include pet sitting, driving for a ride-share company, online tutoring, and joining a focus group. 
• Build an emergency fund: Aim to save three to six months’ worth of expenses as a cushion in case of a personal emergency or unexpected expense. 

Protect Your Credit During Hardship with Proactive Steps

Writing a financial hardship letter can help you maintain a good credit score during a crisis. While navigating your situation, it’s important to continue monitoring your credit. To make this easier during times of stress, check your free credit report card to see what’s happening with your credit at a glance.