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Guide to Writing Financial Hardship Letter

A financial hardship letter is one that is written to a bank or financial institution to explain a person's financial troubles and to ask that creditor for a remediation plan in order to keep a home from being repossessed for non-payment. In fact think of a financial hardship letter as an attorney for the defense as you plead your case to the bank's loss mitigator and explain why you should be allowed to stay in your home.

Facing the prospect of moving out of your family home is a scary thought. In many cases the homeowner has spent years in the home raising a family and making his or her mark on that structure. To lose it and make the children leave their friends and schools is heartbreaking. A hardship letter explains this point as well as what you will do to help your cause. Do you have a plan? Is there any prospect for a better job?

Why should you spend s much time on a letter? Think of it this way: A loss mitigation for a bank is probably tasked with a two to three hundred cases. Just imagine reading that many letters. It's a daunting task and so for you to get quick results and not be mired in with a few hundred possibilities you have to make your letter rise above the pack.

The main points for a financial hardship letter are:

  1. Subject Line Request - Right off the bat let the loss mitigator know what you are requesting.
  2. Brevity - Don't let your financial hardship letter go on for page after page. Keep it as short as possible.
  3. Personal - Let the loss mitigator get to know you and your circumstances.
  4. Clarity - Get your points across in the clearest possible way and then provide a summary.
  5. Information - Make sure you leave nothing out of your letter. Attach important information such as bank statements, cash flow documents, income tax statements, letters of reference, etc.
  6. Be Appreciative - The person reading this letter did not get you into this mess but he or she is the one that can help you out of it. So be thankful and humble in your tone.

The financial hardship letter is not the only tool in your chest for a financial reprieve but it is by far one of the most important. So make it your prime instrument when dealing with the bank and get it in soon.
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