Thursday, November 8, 2007

Hardship Letter example

Here's a Hardship Letter I wrote to American Express. You can use this as a template for your own letter. I worked out a 72% settlement with them. Your circumstances are probably different so include them as needed.


In regards to: (Your name) - (account number)

American Express
Attention: Settlement Department

Dear American Express,

Subject: Hardship

I am requesting a Settlement of 50 to 60 percent due to my severe financial situation.

My income dropped and does not allow me to make full monthly payments. My paychecks from my employer, (Employer name), and my wife, (Your wife's name)'s, paychecks barely cover our 1st and 2nd mortgage payments.

I started working for (Employer Name) in (Month), (Year). My salary at (Employer Name) is ($xx,xxx.xx). I am including my and my wife’s most recent paycheck stubs as evidence of our earnings. My wife’s annual salary is roughly ($xx,xxx.xx). That gives us a gross monthly income of ($xx,xxx.xx). But our net monthly paychecks total ($x,xxx.xx). I am also including our mortgage statements from (1st Mortgage lender) and (2nd Mortgage lender). Our mortgage payments are ($xxxx) per month. So we have only ($xxxx.xx) a month left over for living expenses, car payments and credit card payments. I am also including a spreadsheet of my monthly credit card payments, car payments, and living expenses. As it is, I run in the negative each month. I requested loan modifications from my two mortgage companies but I was denied. I have spoken to DMPs but we don’t qualify. I am trying to avoid Bankruptcy and/or Foreclosure.

Our normal monthly payment on our 1st mortgage is ($xxxx.xx) and our normal monthly payment on our 2nd mortgage is ($xxxx.xx). So we are supposed to be paying ($xxxx.xx) per month just in mortgage payments – that’s (xx) percent (total mortgage payments divided by net monthly income) of our net monthly income just for mortgage payments! We need some help.

We have living expenses of ($xxx)/mo. (groceries, gas, etc.), Utilities ($xxx)/mo. (Water, Gas, Electric), Insurance premiums ($xxx)/mo. (Life, Auto, Home) and Property Taxes ($xxx)/mo. We have credit card debt and auto loans of about ($xxxx)/mo (see attached spreadsheet). We are trying as honorably as we can to make our payments each month.

Please give us a settlement of 50-60% of what we owe. As it is I would have to borrow that amount. I have no assets and no equity in my house. I have been laid off of work for a total of (some number) months since (Month/Year). These layoffs ate all of my savings, 401Ks and home equity. I have gone from planning for the future twenty years ago to trying to survive week to week. This is not what I or my wife ever envisioned would happen to us. It is a hopeless situation.


(Your name)
(Your address)
(City, State, zip code)
(Mobile number) (Mobile – call first)
(Home number) (Home)

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