While it's embarrassing when you don't have enough money to pay your creditors, it's not an insurmountable problem. Many creditors are willing to work out flexible payment terms once they know you're experiencing fiscal difficulties. Writing a financial hardship letter is one way to explain your situation and begin the process of finding a solution.

Formal Format

Type your name at the top of the page and press the Enter key. Type your physical address and telephone number on the next two lines, pressing Enter after each. Hit the Enter key twice and type the date of the letter, then do it two more times and type the name and address of your creditor using the same format. You'll find this information on a letter or statement from your creditor. Press Enter two more times

Now it's time to let your creditor know which account the letter is about. Type "Re: Account no. 123," replacing "123" with the number of your account with the creditor. That information should also be in a recent statement or letter. If you don't have your account number, type "Re: Account of (Name)," replacing "(Name)" with your full name. Press Enter two times. Type "Dear (Creditor's Name):" and press Enter twice.

Type a sentence that explains why you are writing the letter, such as "I am writing this letter to explain why my account is past due." Follow that with a sentence or two that provides more detail, such as, "I have been out of work for three months and I have no prospects for a new job" or "My employer reduced my scheduled work hours from 30 hours a week to 20 hours a week, cutting my income by one-third." Be specific and truthful.

Type a sentence that explains what action you want the creditor to take. For example, "I request that you accept $500 as payment in full of my balance of $1,000." You might also ask a creditor to change the due date for your payments or to accept smaller payments spread out over a longer period of time than the original terms of your account. Press Enter twice at the end of the paragraph.

Type "Sincerely," and press "Enter" four times to leave a blank space for your signature. Type your name. Type a similar letter to your other creditors.

Print and sign two copies of each letter. Mail one signed copy to each creditor in a stamped, sealed envelope. Keep the other copy of each letter for your files.

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