Sample Hardship Letters

For many of us, debt is an unavoidable fact of life. The mortgage. Car loan. Credit card bills. Hospitalization fees. Continuing-care expenses. Lawyer fees . . . .

College debt alone now averages about $24,000, according to a March 2011 blog post on CBS's And 2 out of 3 debtors are finding it an uphill task to repay their student loans.

In the past few years, tens of thousands of Americans have become virtually bankrupt. There have been lay offs. Savings have all but vanished. Marriages have broken down. Anger, frustration, helplessness, bitterness . . . have undermined family life.

If you are one of the many Americans staring down the barrel of delinquency, you may need to send your lender, investor or loan servicer a hardship letter to workout or modify a loan.

The hardship letter is best left to a lawyer/counselor who specializes in preventing foreclosures. However, if you don't want to hire a lawyer/counselor or can't afford to, don't let the thought of drafting a hardship letter by yourself scare you. Drafting one isn't rocket science.

That said, you must remember that your hardship letter will be only one among dozens that will come across the desk of, say, a loss mitigation specialist. Your hardship letter will have no chance of success if it isn't well thought out.

Sample Hardship Letter from a Debtor to a Loan Mitigation Specialist Requesting Forbearance (Postponement) of Loan Payments


[Job Title]

Dear Ms./Mr. [Last name],

We are writing this letter in support of our application for a forbearance plan, which will help us keep our home of 23 years.

We were forced to apply for a forbearance plan because we find ourselves unable to afford the full mortgage payments.

Like thousands of other Americans, my husband and I now find ourselves unemployed. My husband has been a carpenter all his life. My job was outsourced and I don't expect to be hired anytime soon because of the recession.

We are also the caregivers to my 54-year-old brother who became a quadriplegic after a road accident last summer. He lives with us.

We sold the car. Circumstances even forced us to sell what little jewelry we had. Despite making drastic spending cuts, we still find ourselves barely able to make ends meet.

We have worked hard all our lives. Neither of us really inherited anything more than love, dignity and a good work ethic from our respective families. We believed in the American way of life and we still do.

Quite frankly, we find it embarrassing to have to apply for a forbearance plan. But we admit we have no choice.

We fully intend to make the mortgage payments but can unfortunately now pay no more than $700 a month. My husband and I now do odd jobs around the neighborhood and can afford no more.

We hope the attached information about our financial profile at the time of writing this letter will help in convincing you to approve our forbearance plan application.

Do get in touch with us if you have any questions or need more information to process our application.

Please help.

Thank you.



[Account No.]