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The COVID-19 pandemic has affected nearly everyone on the planet to some degree. And while the economic impacts have been severe for people across the spectrum, those who were struggling even before it began have been hit especially hard.

Reduced hours, lay-offs, or lost wages due to medical leave have all contributed to families being unable to make timely payments on their monthly bills. This not only jeopardizes your financial pictures today, but it can harm your financial future as well. However, there are options when it comes to paying your debts, and today I’m going to tell you about the hardship letter, and why it can be a key part of your debt resolution strategy.

Hardship letters explain your financial situation to credit card issuers, banks, or creditors, by giving some insight into how you can resume regular payments. If you have bills to pay or need a payment plan to catch up, writing a letter may be the first step in convincing a creditor to work with you. 

The first step in writing a hardship letter is understanding your financial problem is and being able to offer a credible explanation and solution to the problem.  A financial hardship occurs when a person cannot make payments toward their debt, and the financial hardship letter can help explain why your account is behind. Creditors may use them to determine whether or not to offer relief through reduced, deferred, or suspended payments. 

There are various situations that may qualify as a hardship. The most common examples are illness or injury, loss of income, natural disasters, divorce or death and military deployment. However, it matters less what your reason is, and more that you are honest about it and willing to find a solution for repaying what you owe.

Now that you’re ready to write your letter, you need to think about your ultimate goal. What are you going to ask for specifically? There are several requests you can make from your creditor, collection agency, or mortgage lender, including: suspending past due amounts, bringing your account current, lowering your regular payment amount or considering a settlement option.

If you’re not sure about your options, you can always work with a personal financial coach who can help you explore your options. (Southern Bancorp Community Partners’ counselors are experienced in writing letters to creditors for multiple types of hardships, including life events, credit cards, and other debt.)  However, if you’re ready to move onto writing, here are a few tips to consider when drafting your letter:

Keep it original

The purpose of a hardship letter is to convey a sense of sincerity and commitment to your lender. Copying someone else’s letter or just finding one on the internet is the wrong move. It needs to come from the heart…your heart.

Be honest

If you say anything in the letter that seems false or is obviously untrue, be prepared to get rejected.

Keep it concise

It’s important to be as brief and straightforward in the letter as possible. It should include no more than four paragraphs and not be longer than one page if you can help it.

Don’t cast blame or dodge responsibility

Hardship letters are designed to explain circumstances, not point fingers. Lay out the facts and take responsibility for what you can.

Don’t use jargon or fancy words

A great way to keep your letter short and direct is by using simple language. Creditors want to hear from you, not the dictionary. Write as clearly as if you were speaking to them face-to-face.

Stay focused

Remember to focus on the reasons you are writing this hardship letter and don’t meander around into stories and details that don’t closely pertain to your situation.

Provide the creditor with an action plan

Creditors are looking for a clear path to get you back on track, so be as clear about your approach as possible. If you leave too many details out, they may not think you’re committed to solving the problem.

Talk to a Financial Counselor/Coach

A financial coach can help you explore all your options and ask for the right kind of help.

Organizing your letter is also important.

  • The first paragraph should be an introduction to your problem.
  • The second should include your solution.
  • The third should include what you would like the creditor to consider about your situation.
  • The last paragraph should contain a list of enclosed documentation and a sincere thank you for the creditor’s time and consideration.

Deciding to write a letter can be scary at first, but following these suggested tips can make the experience a bit more pleasant. If you have any questions, as always you can contact me at or call me at 662-624-5776.  Until next week—Stay financially fit!

Charlestien Harris AFC/AFCPE

Credit/HUD Certified Housing Counselor

Southern Bancorp Community Partners

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