Sample Hardship Letter
To Avoid Mortgage Foreclosure

Financial hardship letters are typically directed towards creditors when the author is in some sort of financial difficulty and is seeking some type of financial relief. The two most common situations that require financial hardship letters involve mortgage debt or credit card debt. The real-life sample hardship letter below is seeking relief from a bank in order to avoid foreclosure on a house mortgage.

(print Financial Hardship Letter on personal stationery)

235 Mountaintop St.
Denver, CO 80260

July 27, 20xx

Mr. Jeffrey Lantos
Vice President, Customer Credit Issues
Morgan-Bentley Savings and Trust
2575 Sherman Ave.
Denver, CO 80261

Dear Mr. Lantos:

Re: Request For Short Sale - 235 Mountaintop St., Denver CO

I am writing this financial hardship letter directly to you as advised by Michael Wilkie, Manager, at the Valleyview Branch of your bank.

In January of this year I was laid off from my job as an aircraft mechanic due to cutbacks caused by the general downturn in the aviation industry necessitated by high oil prices. Ever since my three-months of severance pay ran out, we have been struggling to make ends meet on my wife Anne's salary as an administrator for a medical clinic. Her $33,000 per year is barely enough to support our three children and certainly cannot cover our total family living costs including mortgage payments.

Consequently, for the past six months we have had no other choice but to cover the monthly mortgage payments for the above-noted address out of our family savings account. Unfortunately, after one more payment those savings will be completely gone. To add insult to injury, we recently learned that our house is now worth far less than it was when we purchased it three years ago, due to the general downturn in the real estate market across the country. Finally, our 8-year old daughter Jenna was diagnosed in February of this year with a form of cystic fibrosis. Although treatable, the total monthly cost of her medications is $550 which is not covered by insurance.

Although I am actively looking for a job in my trade, things don't look too promising given the current state of the aviation industry. If I don't find something soon for which I am qualified I will have to take a job for much less money. However, even if I was lucky enough to somehow land a job in my field we wouldn't be able to cover all of our family's monthly expenses, especially with the added expense of my daughter's medicines. I have attached a detailed monthly cash flow statement that clearly shows our monthly shortfall as well as a letter from the specialist detailing our daughter's condition and the medications required.

My wife and I have carefully reviewed our financial situation with an accountant friend and have concluded that the only possible way we can survive financially as a family is to sell the house in order to eliminate the major monthly mortgage payment of $1,385. We are aware of a three bedroom apartment that will become available in three months for a monthly rent of $790 where the family could live reasonably comfortably until we get back on our feet financially.

In light of the above, I humbly and respectfully request that you allow us to execute a short sale of our house as soon as possible so that we may avoid mortgage foreclosure and financial ruin. I can be reached at xxx-865-4321 if you have any questions or require additional information.

Very sincerely,

Michael Claiborne
Attach:  Monthly cash flow statement

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