What Is a Hardship Letter?
A Hardship Letter is a document that individuals can use when they are not able to fulfill their financial obligations due to specific complicated circumstances. The purpose of the letter is to notify the creditor about the hardships that the debtor is going through, and ask them to change the conditions of the deal to help the debtor.
Check out our library below to browse printable Hardship Letter templates and samples.
A simple Hardship Letter can help the debtor to modify the terms of their financial obligation and make it easier for them to pay their debt. With this letter, the debtor can ask their creditor to suspend past due payments, lower minimum payments, modify their loan, and other options that can help to improve their situation.
Hardship Letter Types
A Letter of Hardship can be applied to different types of loans and to various situations. The most popular types are described below.
- Hardship Letter for Mortgage. Debtors can use this document to convince their lenders to modify their mortgage due to hardships that have occurred. Generally, the lender has a set of requirements that the debtor must meet if they want their mortgage to be modified.
- Hardship Letter for Shortsale. The letter is supposed to be used when individuals can no longer make their mortgage payments due to financial difficulties. With this letter, they can apply to sell their house for a price less than the amount of the balance owed on their mortgage.
- Hardship Letter for Immigration. This document is applicable to situations when individuals want to explain the complications of their situation to the immigration officials that are managing their case.
- IRS Hardship Letter. The document can be used when an individual is not able to pay the taxes they owe. The purpose of the letter is to inform the Internal Revenue Service about the individual’s circumstances and apply for the IRS hardship status.
- Loan Modification Hardship Letter. Debtors can use this type of letter when they want to modify their loan conditions because of the hardships that have occurred. The debtor should describe the exact reason that affects their ability to pay the mortgage. Check out our ready-made Sample Hardship Letter for Loan Modifications to use as a reference when composing your letter.
- Financial Hardship Letter. This type of Hardship Letter is supposed to be used when an individual wants to ask for leniency or special consideration due to their difficult financial situation.
How to Write a Hardship Letter?
While writing the letter the individual should remember that it is necessary to be honest. Regardless of the reasons why the individual came to the decision to submit this document, everything stated here should be proven with evidence and attached to the letter. A Hardship Letter template should include the following information:
- Introduction. The individual should start by introducing themselves and stating their full name. They can also include their current address in this part of the letter.
- Information About the Loan. Individuals can use this part to designate information about the loan, mortgage, or any other financial obligation they are not able to fulfill anymore. It should contain information about the loan agreement, the loan amount, how much has been paid, how much has left, etc. If the Hardship Letter is dedicated to non-financial reasons (for example, immigration case) then it should be indicated in this part of the letter.
- Description of the Situation. Here the individual can depict the hardship that has occurred and prevent them from fulfilling their obligations. The most common circumstances that usually affect the financial stability of an individual are job loss, injury, divorce, military deployment, and others.
- Request. In this part of the letter, the individual can ask the addressee (in the majority of financial letters it is a lender, in other cases, it can be a government representative) to change the conditions for them and show leniency due to their complicated situation.
- Conclusion. The individual can end the document by signing and dating. They can also express their hope to hear from the addressee soon.
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