Sample Hardship Letter
1575 California St.
Denver, CO 80202
February 29, 20xx
Vista Peaks Estates
735 Londoner Road
Denver, CO 80255
Dear Mr. Naulter:
This is in response to your recent request for some background on my current financial situation.
I spent more than 12 years building up my financial services and mortgage-banking company from scratch into a successful going concern. During that period I was so personally committed to that family business that almost all retained earnings each year were channelled right back into the business. That reinvestment strategy worked well in good times but when the company ran into cash flow problems it meant that there were no ready cash reserves to draw from.
At its peak, the company had 132 employees in five offices situated across the USA. Ongoing operating costs ranged as high as $600,000 per month as they covered employee salaries, healthcare benefits, payroll taxes, office leasing costs, supplier and vendor payments, etc.
Tragically, all of this came crashing down quite suddenly in early 20xx as my company became one more casualty of the nationwide and global collapse of the financial and credit markets. Essentially, as cash flow quickly dried up, we were forced to lay-off all of our employees and shut down all of our operations in a matter of weeks. Due to that widespread market crisis, our primary income source, loan originations - stopped coming in almost overnight.
I did everything within my power over a number of months to keep the company afloat. We had to borrow funds from private lenders and establish emergency lines of credit against the equity in our properties. All of our cash reserves and equity at the time went directly into covering monthly overheads as we tried to weather the storm. Sadly, none of these measures were enough, and the company was forced to cease operations in December 20xx.
Since I had given personal guarantees to Wall Street credit institutions, I was forced to seek credit protection and consequently filed for bankruptcy. It is such a cruel irony that, as a long-time lender and advocate that one should always strive hard to protect their credit, I am now the one with credit difficulties.
My wife Sharon, who has been the primary caregiver to our three children is back to work in her profession as an interior designer and interior decorating specialist. I have successfully rekindled my investor relationships and am fully involved in assisting my clients in acquiring, renovating and reselling their properties. To-date, we have completed more than 17 projects and our order backlog of orders continues to grow and expand into the next few years.
My wife and I have carefully reviewed our financial situation and have concluded that it would be prudent (at least for the next two years) to rent and gradually rebuild our savings towards a large down payment for the purchase of a home in the future.
In the meantime, we want our three children (ages 7, 10, and 13) to continue to feel secure living in a home that has the spacious feeling, natural light and warmth such as the home that you are offering for rent, in the same neighborhood in which they have been living since they were toddlers.
We look forward to a positive response and thank you in advance for your kind consideration.
Brendan H. Sifton
1575 California St.
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