Financial Hardship Letter

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									This is a template that can be used by an individual or entity to request debt relief or
loan modification. If an involuntary reduction of income or an unavoidable increase in
expenses is causing financial hardship, this template can be used as a guide on drafting
a letter addressed to the lender requesting modification or relief of the debt. This
document should be used by individuals or entities that are experiencing financial
hardship due to unavoidable circumstances and want to obtain relief or reduction of debt

With the recent downturn in economic conditions and unemployment rates at record high
levels, difficult financial times are being experienced by many individuals, families and
businesses throughout the US. If you are experiencing financial hardship or are struggling to
keep up with your monthly bills and expenses as a result of an involuntary reduction of
income or an unavoidable increase in expenses, it may be in your best interest to prepare
and submit a financial hardship letter to your bank and/or loan servicing company,

    1. Debt relief
    2. A temporary reduction in monthly payments/dues, or
    3. A loan modification plan

Often times sending a detailed letter directly to lenders on your own behalf can result in
timely and much needed relief and resolution to your current financial situation and
struggles. It is recommended that you send your letter via certified mail to insure that it is
received and read.

Your letter should include a description and proof of the following:

     Involuntary reductions of income:
       Lay-off
       Significant reduction of hours or wages
       Forced to take a lesser paying job after a lay-off
       Serious illness/death of a borrower/family member
       Bad self-employment year
       Permanent or short-term disability
       Divorce
     Unavoidable increase in expenses:
       Major medical expenses not covered by insurance
       Natural disaster
       Unanticipated urgent property maintenance and/or repairs
       Unavoidable child care expenses
       Significant increase in the adjustable interest rate

Also, be sure to include:

     Your name(s), address, phone number, account number

     Explanation of your current financial situation (include a detailed budget) and your
      inability to pay current financial obligations

     A realistic payment plan proposal of what you can currently afford to pay per
      month, when you will start making payments, and your future payment plan.

     Your credit counselor/attorney contact information

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[Contact Name/Title]
[Lender Name]
[Lender Company Address]

RE: [Your Name(s)]
    [Your Address]
    [Your Phone #]
Account #: [Your Account Number]

Dear [Contact Name]:

Briefly explain what type of financial hardship relief you are seeking and why.
My name is [Your Name] and I am writing in regards to account # _____________. I am
currently unable to make the scheduled monthly [Payment Type] payments of [Amount of
Payment] and am requesting a temporary monthly payment reduction. I have been a loyal
and dedicated customer for over 10 years and I would greatly appreciate it if you would
work with me to set up an acceptable and affordable temporary payment arrangement.
At the beginning of this year, my work schedule was reduced by 70%. Since then I have
drained all of my savings to make ends meet. I have also put forth a concerted effort to find
work, but so far I have not been successful. As a single mother of two teenage boys, I am
really struggling to keep up.
Provide proof of your current budget and a realistic payment plan proposal.
Based on the detailed breakdown of my current household budget (attached), I can only
afford to pay [Amount of Payment]. I have essentially cut out every unnecessary expense
possible and my family and I are living with the bare necessities.
Explain your plan for getting payments back on track. Convince the lender that you have a
plan that will work.
I am hopeful that I will be able to resume making normal payments within the next 6
months. My current employer will be lifting the work schedule restrictions in October. And,
in the meantime I am going to continue to look for work (permanent, temporary and
contract positions).
I am determined to get back on track and I will do everything in my power to do so quickly.
Include your contact information and your credit counselor/attorney (if applicable).
Please feel free to call my credit counselor/attorney, [Credit Counselor/Attorney Name] at
[Phone Number] to discuss this further, or you can reach me at [Your Phone Number].
Thank you for your time and consideration on this matter.

[Your Name]

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                                 FINANCIAL HARDSHIP SAMPLE DOCUMENT

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