What Is a Hardship Letter and How Do You Write One?

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.

Importance of the Hardship Letter or Affidavit

With a short sale, the main thing the lender will evaluate is whether the amount they’ll receive in the short sale is as much as they expect to get from selling the property following a foreclosure. If it is beneficial for the lender to do a short sale and you meet the criteria, you’ll be approved. The hardship letter or affidavit is merely part of the process.


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.

Points to Address

Hardship letters are often no longer than a page. They should address all of the following key points:

  • How the current financial situation arose
  • What has changed in the real estate market since the original financing
  • What you have done to try to improve your situation
  • Why it cannot be further improved

Lenders may require documentation such as pay stubs, tax returns, or bank statements to prove that you lack the resources to repay the mortgage in full. It is also a good idea to provide comparable sales from an agent to back up your claim that you can't get enough for your home to cover the costs.

Hardship Letter Mistakes

Do not use the letter as an outlet for anger or to try to make a bargain or a political statement. Refrain from criticizing the bank, stating that relatives will loan the money needed, or suggesting that you have a secret account with other funds. Doing so could cause the bank to follow up on these items and require the additional money to complete the sale.

Do not promise things will turn around soon, either, because that is a good reason for the bank to turn you down. Keep in mind that if there’s any sign a homeowner will become financially whole again, the lender will jump on it.

Your hardship letter is not the place for optimism.

Dont Mention Any Available Outside Money

Do not mention your ability to obtain more money in your hardship letter. This may seem obvious, but it is not always so cut and dry. You may think you are describing a negative situation, but the lender may view your statement positively.

For example, you could be describing the fact that you have exhausted all of your resources trying to pay your debts. You may state, “What do they want you to do, borrow $15,000 from your sister?”

If the lender thinks you have a sister who could potentially lend you $15,000, you may not be approved for a short sale, or you may have to put in a seller contribution when the short sale occurs. Do not use this type of example to prove a point. Do not include any additional money you could have access to, even if it is theoretical.

What Is a Hardship Letter?

A hardship letter or affidavit (see below) is part of the loss mitigation application process and is something you must provide along with pay stubs, tax returns, a financial statement, bank statements, and any other information your loan servicer (the company that handles your loan account for the lender) requests. (To learn more about loss mitigation applications, see Steps to Get Your Mortgage Loan Modified.)

Specific Steps for Writing a Hardship Letter:

Every hardship letter should be personalized, original and direct. However, there are several different ways to format or plan the letter’s contents. Here is a quick breakdown of a common four-paragraph outline that you can use to guide your own letter.

How to Describe Your Hardship

The first paragraph should focus on introducing yourself and your particular situation. This will be the section that explains exactly what your hardship is and establish your desire to work with the lender to continue paying off your debts.

Here’s an example for a medical hardship letter:

“I’m writing to you because I was unable to work for several months due to an injury. During this time, our emergency savings were exhausted and we fell behind on our debts. Now that I am healed from my injury and ready to return to work, I believe I could resume regular payments if you would make adjustments to our loan.”

This paragraph works because it is brief. With only four lines, it doesn’t drag on but clearly explains the situation without too many unnecessary details. It also mentions that the borrower would be ready to resume payments if given a modification.

Of course, not every situation will be resolved. For example, you might not have an injury that has fully healed. If your hardship was permanent, you’ll have to explain that your situation has changed, but still intend to resume making payments with the creditor’s help.

Here’s an example for a divorce hardship letter:

“Due to my recent divorce, my household has been reduced from two incomes to one. Because of this loss of income, I have fallen behind on my mortgage payments and sunk into credit card debt to stay afloat. I’m working with a debt coach to come up with a budget and a plan to repay my debts, which I think I can do with your help.”

Again, the focus is on explaining quickly what happened and why the borrower has fallen behind on your payments. It also mentioned that they believe they can resume making payments if the creditor agrees to work with them.

This paragraph is a great example of mentioning two types of adversities – a life event hardship and a mortgage hardship. If you have multiple hardships that contribute to your situation, you should list them all. Of course, try to avoid too many paragraphs and long, unbroken narratives.

Your Response to the Hardship

After you describe your hardship, it’s time to go into more detail about what you are doing to resolve the situation. The second paragraph will focus on what you have done or are currently doing to resolve your hardship and keep up with your obligations.

Be clear and honest when describing the steps you have taken so far. Ultimately, your actions alone will not be enough for you to resolve the situation, and the letter should support the idea that you need the creditor’s help. Avoid holding back and minimizing your situation.

For example:

“Since my divorce, I have worked hard to live under a restricted budget, but I have cut and reduced everything I can and still don’t have enough to meet all of my obligations. Now that my divorce is final, my income and expenses have stabilized. While I don’t have enough to make ends meet under my current budget, I believe a reduction in payments for the next six months from you will enable me to resume making regular payments going forward.”

Remember, the goal of the letter is to get some kind of help from your creditor. The letter has to establish that you need that help if you are going to succeed.

What is the Goal of the Hardship Letter?

Now that you’ve stated your hardship and discussed what you have done so far, you need to state more explicitly what you want from your creditor. This is the paragraph where you can directly ask what you expect the lender to do.

For example:

“I believe a reduced interest rate would allow me to afford to make my payments going forward. I’d like to discuss this with you as soon as possible so we can work together to find a solution.”

Short and to the point, this message tells the lender exactly what you expect, and what they should consider. By providing a solution that will solve both you and the lender’s problem, you can prove that you are willing to do the work you are proposing.


The last paragraph is your conclusion. This is your chance to sincerely thank the lender for their time and express your hopes of working with them in the future to solve your joint problem.

You’ll also want to include supporting documentation to back up everything you have said so far. Be sure to include copies of relevant bills, orders, letters, and any other paperwork to substantiate your hardship claims and mention their inclusion

For example:

I truly hope that you will consider working with me. I’ve enclosed copies of the accident report and medical records as documentation to my claims. Please reach back out at your earliest convenience so that I may begin to settle my outstanding loans.

A quick ending, signature, and date are all you need to wrap up your debt hardship letter. Remember to follow up once the letter has been sent by phone or in person.

Do You Even Need to Write a Hardship Letter?

You may not need to write a hardship letter to get the help you need. Some financial institutions provide all the information to request hardship assistance on their websites.

Bank of America, for example, has a page for home loan assistance that walks you through your options, shows what documents you might need and provides phone numbers you can call to ask for help. Through their site, you will learn that if you are struggling to pay a mortgage owned by Fannie Mae or Freddie Mac, you will need to complete an official mortgage assistance application and attach any required documentation.

Some mortgage servicers, such as Fifth Third Bank, will even allow you to complete a hardship application online.

Similarly, American Express has a page where its credit card customers can learn how to request financial relief in the form of temporarily lower monthly payments and interest rates. You may be able to view plan options and enroll by logging into your account online. Other creditors also offer ways to request financial hardship assistance online while logged in to your account.

If you will be making a phone call or speaking with someone via online chat, writing a hardship letter first might help you organize your thoughts. Instead of writing a complete letter, though, you may find it easier to write a script or make a list of bullet points you want to address.

Mistakes to Avoid in Your Hardship Letter

When you write the hardship letter, don’t include anything that would hurt your case. Here are some examples of things you shouldn’t say in the letter:

  • Don’t say that your situation is your lender’s fault or that their employees are jerks.
  • Don’t state that things are going to turn around for you soon because if the lender thinks you might have the financial means at some point in the near future to repay part of the debt, you might not be approved for loss mitigation.
  • Don’t mention that you have access to funds that aren’t shown elsewhere in your short sale application. For example, don’t say something like “I could borrow $10,000 from my mother” because then the lender might require a contribution from you before approving a short sale.

What Is the Purpose of a Hardship Letter?

Before you begin drafting, you need to decide on the goal of the letter. What are you going to ask for specifically? There are several requests you can make from your creditor, collections agency, or mortgage lender, including:

  • Suspending past due amounts
  • Bringing your account current
  • Adjusting your interest rate
  • Lowering your minimum payments
  • Modifying your loan
  • Agreeing to a short sale of a home
  • 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. Our credit coaches are experienced in writing letters to creditors for multiple types of hardships, including life events, credit card, and debt.

Tips for Writing a Short Sale Hardship Letter

There are certain things you could say or do in a short sale hardship letter that could keep your short sale application from being approved. You want to avoid these mistakes!

Talk to a Foreclosure Lawyer

If you’re facing a foreclosure and have legal questions, consider talking to a lawyer to get advice about your particular situation. You might also consider talking to a lawyer if you’re trying to get a loss mitigation option, but the servicer isn’t complying with the law or is treating you unfairly. (To learn when you should consider hiring a lawyer to help you with a modification, see Nolo’s article Should I Hire a Lawyer to Help With My Mortgage Modification?)


  • Jeremy C June 18, 2016 I worked at the loss mitigation department for a major bank and we used to get the same letters from different people again and again because most people would just download and print some stock letters from websites such as . While its totally ok to get ideas from the internet, anybody trying to write an effective hardhip letter should put their own spin on it. Although it is not definitive, using pen and paper does help. It looks more authentic and it is more effective when presented to the banks decision makers. Reply