How to Document a Financial Hardship

Write a letter to creditors to document financial hardship.

Economic troubles make it difficult for many people to repay the debts they owe. While it may be possible to negotiate a settlement plan that eases your financial burden, you may be required to document a financial hardship before creditors are willing to do this. The most common way to do document a financial hardship is through a letter to the creditor which documents the reasons why it is difficult to maintain your financial responsibilities.


Step 1

Include a brief description detailing the specifics of the financial hardship. According to, valid reasons for documenting financial hardship include job loss, health problems, a death in the family and military service.

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Step 2

Provide proof. Include documents that support the claim, such as bank statements, late notices, verification of income or other documents that detail financial hardship.


Step 3

State the type of relief sought. State exactly what you are looking for the creditor to do, such as lower or defer payments, lower the interest rate, refinance or approve a short sale on a property. Debts that may qualify for such negotiations include medical bills, student loans, personal loans, credit cards and mortgages.



Step 4

Disclose the timeframe in which the creditor can expect the situation to be resolved. A creditor may be more willing to work out some type of negotiation if he expects that someone may be able to repay the debt in the future.

Step 5

Keep copies of all correspondence and financial documents sent to, or received from, the creditor.



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