How to write a financial hardship letter to creditors

When facing financial hardship, you still have a responsibility to your current creditors. If you are unable to make your payments, contacting the creditor in writing to explain your situation and your plan to resume payment may save your account from going into default. Protecting your accounts from going into default or being sent to collection may protect your credit score, and prove to future potential creditors that you are responsible.

State the intent of your letter in the first paragraph. For example, begin by noting that you are writing to inform the creditor of extreme financial hardship that has caused you to fall behind in your payments, and explain what you are asking of the creditor, such as an extension or an opportunity to refinance your loan.

Explain your situation in detail in the second paragraph. Provide details about the circumstances that led to your current state of financial hardship. Circumstances may include unforeseen medical emergencies, unemployment, divorce or the death of a spouse who was a major contributor to the family's finances.

Enclose copies of documents that support your claim of financial hardship, and note at the end of your second paragraph that these documents are enclosed.

Use the third paragraph to make note of the steps you have already taken and further action you intend to take to get back on track. Include your willingness to negotiate with the lender to reduce payments, even if only temporarily, so you can get caught up on payments. Include information about credit counselling you are undergoing, if you have been to see a credit counsellor who is helping you take action to consolidate your debt.

Thank the creditor for their time and consideration in regards to your situation and your offer.


Do not wait to send a financial hardship letter if you know you will be unable to meet your obligations. The sooner you send the financial hardship letter, the earlier you and your creditors can begin working on a solution together.

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Things Needed

  • Documented proof of financial hardship

About the Author

Jennifer Hudock is an author, editor and freelancer from Pennsylvania. She has upcoming work appearing in two Library of the Living Dead Press anthologies and has been published in numerous print and online journals, including eMuse, Real TV Addict and Strange Horizons. She has a Bachelor of Arts in English/creative writing from Bloomsburg University.

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