If you’re struggling to keep up with credit card payments, personal loans, medical bills, or other debts, you may be able to request a hardship accommodation from your creditor.
Many lenders offer hardship programs — but consumers often don’t know:
- What qualifies as a hardship
- What information to provide
- How to make the request
- When hardship requests are approved
Here’s what you need to know.
What Is a Hardship Request?
A hardship request is a formal request asking a creditor to temporarily adjust your payment terms because of financial difficulty.
Hardship programs may include:
- Reduced monthly payments
- Lower interest rates
- Waived late fees
- Temporary forbearance
- Deferred payments
- Long-term repayment plans
These programs are often available for:
- Credit cards
- Personal loans
- Auto loans
- Mortgage loans
- Medical debt
- Student loans
What Qualifies as a Financial Hardship?
Creditors typically consider hardship requests when there has been a significant, documented change in your financial circumstances, such as:
- Job loss or reduced income
- Medical emergency
- Disability
- Divorce or separation
- Death of a spouse
- Major unexpected expense
- Natural disaster
- Military deployment
The hardship usually must be recent and beyond your control.
When Should You Make a Hardship Request?
The best time to request hardship assistance is:
👉 Before you fall too far behind.
Many creditors are more flexible when:
- You are only 30–60 days late
- You contact them proactively
- You show willingness to pay something
Once an account is charged off or sent to collections, options may become more limited (though settlement discussions may still be possible).
What Information Do You Typically Need to Provide?
Most creditors will ask for documentation to support your hardship.
Common documents include:
1️⃣ Proof of Income
- Recent pay stubs
- Unemployment benefit statements
- Disability payments
- Social Security award letters
2️⃣ Proof of Hardship
- Termination letter
- Medical bills
- Hospital discharge papers
- Divorce decree
- Insurance claim documentation
3️⃣ Monthly Budget Information
Creditors often ask for:
- Monthly income
- Rent or mortgage payment
- Utilities
- Food expenses
- Car payments
- Insurance
- Other debts
They want to see whether:
- The hardship is legitimate
- You truly cannot afford current payments
- A modified payment plan is realistic
How to Make a Hardship Request (Step-by-Step)
Step 1: Contact the Creditor’s Hardship or Loss Mitigation Department
Call and ask specifically for:
- “Hardship department”
- “Financial assistance department”
- “Loss mitigation”
Many major banks have dedicated hardship teams.
Step 2: Clearly Explain Your Situation
Be concise and factual:
- What happened
- When it happened
- How it affected your income
- Whether the hardship is temporary or ongoing
Example:
“I lost my job in January and my income has dropped by 60%. I’m actively seeking work and expect this to be temporary, but I cannot afford my current payment.”
Step 3: Propose a Specific Solution
Creditors are more likely to approve a request when you suggest something reasonable, such as:
- “Can my interest rate be reduced temporarily?”
- “Can my payments be lowered to $150 per month for six months?”
- “Can late fees be waived while I recover?”
Be realistic. Offer an amount you can actually afford.
Step 4: Submit Documentation Promptly
If they request paperwork:
- Send it quickly
- Keep copies
- Confirm receipt
Delays can result in denial.
Step 5: Get Any Agreement in Writing
Before relying on a hardship plan:
- Request written confirmation
- Confirm new payment amount
- Confirm due dates
- Confirm interest rate changes
Do not assume a verbal agreement is permanent.
A helpful checklist is below.
When Do Hardship Requests Get Approved?
Hardship requests are more likely to be approved when:
✅ The hardship is documented
✅ The income reduction is real and verifiable
✅ The request is reasonable
✅ You are cooperative
✅ The account has not yet been charged off
Approval rates are higher when:
- The hardship is temporary
- The lender believes you can resume payments later
When Are Hardship Requests Denied?
Hardship requests are often denied when:
- No documentation is provided
- The request is vague
- The proposed payment is too low
- The account is already in default or litigation
- The lender believes the hardship is permanent
If denied, you may still explore:
- Settlement options
- Debt management plans
- Bankruptcy consultation
Hardship vs. Settlement: What’s the Difference?
When struggling with debt, consumers often hear two common options:
- Hardship program
- Debt settlement
While they may sound similar, they are very different strategies.
What Is a Hardship Program?
A hardship program is a temporary modification of your payment terms due to financial difficulty.
It usually means:
- Lower monthly payments
- Reduced interest rate
- Temporary payment pause
- Waived fees
The goal of a hardship program is to help you continue paying the full debt over time.
You are not asking for forgiveness of the principal balance — just modified terms.
What Is a Settlement?
A settlement means negotiating to pay less than the full balance owed.
For example:
- You owe $10,000
- You negotiate a lump-sum payment of $5,000
- The remaining $5,000 is forgiven
Settlement typically occurs when:
- The account is seriously delinquent
- The creditor has charged off the debt
- The debt has been sold to a debt buyer
Key Differences
| Hardship | Settlement |
|---|---|
| You still repay full balance | You pay less than full balance |
| Often temporary | Usually permanent resolution |
| Keeps account open (sometimes) | Often closes account |
| Less severe credit impact | More severe credit impact |
| More common before charge-off | More common after default |
Which Is Better?
It depends on your situation.
Hardship may be better if:
- The financial difficulty is temporary
- You want to preserve your credit
- You can resume payments later
Settlement may be better if:
- The debt is already in default
- You cannot realistically repay the full amount
- The account is already in collections
The right strategy depends on income, timing, and legal exposure (including potential lawsuits).
Can a Creditor Refuse a Hardship Request?
Yes — creditors are not legally required to grant hardship requests in most situations.
Hardship programs are voluntary.
Why Might a Creditor Refuse?
Common reasons include:
- Insufficient documentation
- The hardship is not considered temporary
- The proposed payment is too low
- The account is already charged off
- The creditor does not offer hardship programs
- You are already in active litigation
Creditors evaluate hardship requests based on risk and internal policy.
Are Creditors Required to Offer Hardship Programs?
Generally, no.
There is no universal federal law requiring credit card companies or lenders to offer hardship accommodations.
However:
- Some mortgage loans have federal servicing requirements
- Student loans may have statutory forbearance options
- Certain disaster-related programs may apply
For most unsecured debt, hardship programs are discretionary.
What Can You Do If a Hardship Request Is Denied?
If your request is refused, you may consider:
- Proposing a different payment amount
- Escalating to a supervisor
- Requesting a short-term payment pause instead
- Exploring settlement
- Consulting a debt defense attorney
- Considering bankruptcy if debt is overwhelming
You should never ignore the debt if legal action is possible.
For most unsecured debt, hardship programs are discretionary.
Will a Hardship Program Hurt My Credit?
Possibly.
Some hardship programs may:
- Report the account as “paying under a hardship plan”
- Freeze the account
- Temporarily reduce available credit
However, this may be better than:
- 90+ day delinquencies
- Charge-offs
- Lawsuits
- Judgments
Can You Negotiate Hardship Terms?
Yes.
You can sometimes negotiate:
- Length of reduced payment period
- Interest rate reduction
- Waiver of penalties
- Lump-sum settlement if income allows
Everything depends on your financial situation.
Should You Put the Request in Writing?
Yes — especially if the account is already delinquent.
A written hardship letter should include:
- Your name and account number
- Description of hardship
- Supporting documentation
- Specific request
- Proposed payment amount
- Contact information
Keep it professional and direct. A sample letter is below.
What If You’re Already Being Sued?
If a creditor has already filed a lawsuit:
- Hardship programs are less common
- Settlement negotiations may be more realistic
- Legal defenses may still exist
You should not ignore a lawsuit while pursuing hardship.
Should You Ask for Hardship Before Bankruptcy?
If you’re overwhelmed with debt, you may be wondering:
“Should I try a hardship program before filing bankruptcy?”
The answer depends on your financial situation, the type of debt, and whether your hardship is temporary or permanent.
Here’s how to think about it.
What Is a Hardship Program?
A hardship program is when a creditor agrees to:
- Lower your monthly payments
- Reduce your interest rate
- Waive late fees
- Temporarily pause payments
You are still expected to repay the full balance — just under modified terms.
When Hardship Makes Sense
You may want to try hardship first if:
✔ Your income loss is temporary
✔ You expect to return to work soon
✔ You can afford reduced payments
✔ You only have 1–2 problem accounts
✔ You want to minimize credit damage
Hardship can be a good short-term solution.
When Bankruptcy May Be the Better Option
Hardship may not be enough if:
- You are juggling multiple accounts
- You cannot afford even reduced payments
- You are being sued
- Wage garnishment has started
- Debt exceeds your realistic repayment ability
- Your hardship is long-term or permanent
In these situations, bankruptcy may provide broader relief.
The Risk of Delaying Bankruptcy
Sometimes consumers try hardship programs for months — only to:
- Fall behind again
- Accumulate more late fees
- Face lawsuits
- Damage credit further
If hardship is unlikely to succeed, delaying bankruptcy can make things worse.
Key Questions to Ask Yourself
- Can I realistically repay this debt within 3–5 years?
- Is my income likely to improve soon?
- Am I facing lawsuits or garnishment?
- Do I have multiple creditors, not just one?
If the answer suggests long-term financial strain, bankruptcy may offer stronger protection.
Hardship and Bankruptcy Are Not Mutually Exclusive
Trying hardship does not prevent you from filing bankruptcy later.
However, if:
- Lawsuits are pending
- Garnishment is imminent
- Foreclosure is approaching
You should speak with a bankruptcy attorney before relying solely on hardship programs.
Credit Impact Comparison
| Hardship | Bankruptcy |
|---|---|
| May show as modified account | Public court filing |
| Account may be frozen | Automatic stay stops collection |
| Still owe full balance | Many debts discharged |
| Temporary relief | Permanent legal relief |
The Bottom Line
Many creditors offer hardship programs — but approval depends on:
- Documentation
- Timing
- Reasonableness
- Communication
If you’re struggling financially, acting early gives you the best chance of securing relief.
Need Help Evaluating Your Options?
If you are facing:
- Wage garnishment
- Lawsuits
- Aggressive collections
- Overwhelming credit card debt
You may have options beyond hardship programs, including:
- Negotiated settlements
- Legal defenses
- Bankruptcy protection
Understanding all of your options allows you to choose the best path forward.
Sample Hardship Letter Template
[Your Name]
[Your Address]
[City, State, Zip]
[Phone Number]
[Email Address]
Date: ___________
Creditor Name
[Creditor Address]
[City, State, Zip]
Re: Account Number __________
Dear Sir or Madam:
I am writing to request hardship assistance regarding the above-referenced account.
Due to recent financial circumstances beyond my control, I am experiencing difficulty maintaining my current payment obligations. Specifically, [briefly describe hardship — job loss, reduction in income, medical emergency, divorce, etc.]. This change occurred on or about [date], and it has significantly reduced my available income.
As a result, I am unable to continue making payments in the current amount of $________ per month.
I am requesting consideration for one or more of the following hardship accommodations:
- Temporary reduction in monthly payments
- Interest rate reduction
- Waiver of late fees
- Short-term forbearance
- Structured repayment plan
Based on my current financial situation, I can reasonably afford $________ per month beginning on [date].
I have enclosed documentation supporting my hardship, including [list documents: pay stubs, termination letter, medical bills, etc.].
I value resolving this matter responsibly and would appreciate the opportunity to work with you during this difficult time. Please confirm in writing any hardship arrangement that is approved.
Thank you for your time and consideration.
Sincerely,
[Your Name]
Financial Hardship Request Checklist
If you are requesting hardship assistance from a creditor, use this checklist to make sure your request is complete and well-supported.
A strong hardship request improves your chances of approval.
Step 1: Identify the Account
☐ Creditor name
☐ Account number
☐ Current balance
☐ Current monthly payment
☐ Interest rate (if known)
☐ Number of months past due (if applicable)
Step 2: Clearly Identify Your Hardship
☐ Job loss
☐ Reduction in hours/income
☐ Medical emergency
☐ Disability
☐ Divorce/separation
☐ Death of household income earner
☐ Natural disaster
☐ Other: ___________________
Date hardship began: ___________
Brief description of hardship (1–3 sentences):
Step 3: Gather Proof of Income
☐ Last 2–3 pay stubs
☐ Unemployment benefit statement
☐ Disability/Social Security award letter
☐ Self-employment income records
☐ Bank statements (if requested)
Step 4: Gather Proof of Hardship
☐ Termination letter
☐ Medical bills or hospital records
☐ Divorce decree
☐ Insurance claim documents
☐ Other supporting documentation
Step 5: Prepare a Monthly Budget
List your current monthly amounts:
Income: $__________
Expenses:
- Rent/Mortgage: $__________
- Utilities: $__________
- Food: $__________
- Transportation/Car: $__________
- Insurance: $__________
- Other debt payments: $__________
- Other necessary expenses: $__________
Remaining available amount: $__________
Step 6: Propose a Realistic Payment
Based on your budget, what can you afford?
Proposed monthly payment: $__________
Duration requested (if temporary): ______ months
Step 7: Submit the Request
☐ Contact hardship/loss mitigation department
☐ Send hardship letter (if required)
☐ Submit supporting documents
☐ Keep copies of everything
☐ Request written confirmation of any agreement
Important Reminders
✔ Act early — hardship is more likely to be approved before charge-off
✔ Be honest and factual
✔ Offer an amount you can actually afford
✔ Do not ignore lawsuits while pursuing hardship
If your hardship request is denied, you may still have other options, including negotiation, settlement, or legal protection.
Debt Relief Decision Tree
Should You Request Hardship, Negotiate Settlement, or Consider Bankruptcy?
Use this flowchart to evaluate your next step if you’re struggling with debt.
STEP 1: Are You Current on Your Payments?
✅ YES — I’m current or only 30–60 days behind.
→ Go to Step 2
❌ NO — I’m 60+ days behind, in collections, or being sued.
→ Go to Step 4
STEP 2: Is Your Financial Hardship Temporary?
Examples:
- Temporary job loss
- Short-term medical issue
- Reduced hours expected to improve
- Temporary emergency expense
✅ YES — I expect income to recover within 3–6 months.
👉 Consider a Hardship Request
A hardship program may:
- Lower payments temporarily
- Reduce interest
- Pause payments
- Waive fees
If approved, you repay the full balance over time.
→ If hardship fails, move to Step 4.
❌ NO — My income reduction is long-term or permanent.
→ Go to Step 3
STEP 3: Can You Realistically Repay the Debt Within 3–5 Years?
Ask yourself:
- After basic expenses, do I have money left monthly?
- Can I pay this off without falling behind again?
✅ YES — I can pay something substantial monthly.
👉 Consider:
- Structured repayment plan
- Debt management plan
- Possibly hardship + modification
❌ NO — I cannot afford even reduced payments.
→ Go to Step 5
STEP 4: Has the Debt Been Charged Off or Sent to Collections?
✅ YES
👉 Hardship programs are less common at this stage.
You may want to consider:
- Settlement negotiations
- Legal defense (if sued)
- Bankruptcy consultation
If lawsuit pending → Go to Step 5
❌ NO
You may still attempt hardship, but timing matters.
If multiple accounts are delinquent → Go to Step 5
STEP 5: Are You Facing Legal Action?
- Lawsuit filed?
- Wage garnishment?
- Bank levy?
- Judgment entered?
✅ YES
👉 Consult an attorney immediately.
At this stage, options may include:
- Negotiated settlement
- Legal defenses
- Bankruptcy (automatic stay stops collection)
❌ NO — But I’m overwhelmed with multiple debts.
→ Go to Step 6
STEP 6: How Many Creditors Are You Struggling With?
1–2 accounts only
Hardship or settlement may work.
3+ accounts
Hardship becomes harder to manage long-term.
👉 Consider whether:
- Bankruptcy may provide broader relief
- A global strategy makes more sense than piecemeal hardship
Quick Comparison Summary
| Situation | Likely Best Option |
|---|---|
| Temporary income drop | Hardship |
| Single delinquent account | Hardship or settlement |
| Account in collections | Settlement |
| Lawsuit filed | Settlement or bankruptcy |
| Multiple debts, long-term income issues | Bankruptcy |
| Wage garnishment | Bankruptcy or legal action |
Warning Signs You Should Speak to an Attorney Immediately
- You’ve been served with a lawsuit
- You received a notice of wage garnishment
- A bank account was frozen
- You are using credit to pay credit
- Minimum payments exceed what you earn
The Most Important Question
Is your financial problem temporary — or permanent?
Temporary problems often respond to hardship.
Permanent or overwhelming debt often requires broader legal solutions.
Want a Personalized Evaluation?
Every financial situation is different.
A brief review of:
- Your total debt
- Monthly income
- Lawsuit status
- Asset protection concerns
can help determine whether hardship, settlement, defense, or bankruptcy is the best path.
