How to File for Financial Hardship

How to File for Financial Hardship
••• Making a financial plan image by Allen Stoner from <a href=''></a>

One option for people in need of financial assistance is filing for financial hardship. Financial hardship means different things to different people, reflecting their individual financial needs and specific circumstances. Individuals might file for hardship because of a wide range of financial situations, including mortgage foreclosure, credit default and/or business or personal losses. Although each of these situations is different, they share many of the same basic rules and steps for filing.

Contact your financial institution immediately about your hardship situation and begin negotiations before your situation further declines. This indicates your willingness to resolve the situation and speeds up the process. It also allows you more options for solutions before your financial situation worsens.

Make specific requests to financial institutions for resolving your hardship situation, such as loan modification, lower interest rates or delay of payments. This helps lenders assist you in the best possible way to resolve your financial hardship situation.

Offer a time-line documenting when the hardship occurred and the reason(s) for it, as well as your goals and an estimated time when you expect your financial situation to improve. Be specific concerning the dates when you encountered hardships and your goals for improving your situation. For example, indicating your commitment to paying off credit cards, avoiding foreclosure and so on.

Provide the lending agency with proof or documentation in the form of a hardship letter and supply any necessary financial details. You may later need to file an application depending on your situation and the type of financial solution you are requesting, but providing as many specifics as soon as possible will help clarify your needs. This also tells the creditor or lender you are serious and helps you receive a faster response. There are many different forms for filing financial hardship that are provided through federal programs for lenders to modify loans, adjust rates or provide new payment options, depending on your situation.

Request written documentation of any financial requests granted and steps you need to follow for verification purposes; get these documents signed whenever possible. Make copies, if necessary, of any applications, procedures to follow or solutions granted.


  • Be clear and specific in your hardship letter; create a list of bullet points.