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How to Write a Letter of Financial Hardship to a Credit Card Company and Settle Debt

By Edited Aug 31, 2016 0 2

Times are tough and in these difficult times you might find yourself in financial hardship. If you have credit card debt and are unable to make the minium monthly payments you will soon know the aggravation of the constant calling. Sometimes they will even call you at work making your life a nightmare. It might be necessary to write the credit card company a letter of financial hardship. Please be advised that this works with most companies but there are some who are very difficult to work with. It might be necessary to search out information on the particular creditor or bank you are dealing with to know if this is the best possible action to take.

Be aware that if your debt goes to collection that another letter might have to be written to the debt collection agency for them to stop calling. Usually once a debt goes to collection it can be settled for a smaller amount if it is paid for in a lump sum. This is how many debt settlement companies conduct business. If you wish to take this course of action it is extremely important that you have no contact with the credit card company other than the letter of financial hardship. Never promise to make a payment. This can interfere with the collection process of getting to the point of settling.

A piece of advice when settling. Request that as part of the agreement of the settlement that the company will not file a lose for you to pay taxes on. If they do you will have to pay income taxes on this lose.

Warning: Do research on the net and contact the Federal Trade Commission on your personal rights and laws before tackling this job on your own. As mentioned before, some companies are not so easy to deal with.

Hardship letter example:

October xx, 20xx

Credit Card Company


Town, State XXXXX-XXXX

Attention: Accounting Department

RE: Account#: (place account number here)

Dear Accounting Dept:

I am requesting to close the above referenced account effective immediately. My account number again is XXXXXXXXXXXXXXXX.

I am experiencing severe financial hardship and I will try to make good faith payments to you when I am able.

(Place your address here for communicate. If there has been a change of address note the address here and ask to foward any future contact to this address)

Please communicate with me via mail ONLY!


Your Name Here



Dec 7, 2011 11:24pm
Hadn't even considered the tax implications that you brought up! Guess that's why it's important to do your homework (like reading this article) before hand.

Great article!
May 16, 2012 5:00pm
Wow! what a great idea for an article. Thanx for the timely info.
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