[Sample] Letter of Explanation for Declining Income

Learn how to write a letter of explanation for declining income. Use our sample letter of explanation for declining income as a template for your income explanation letter.

Sample Letter Of Explanation For Declining Income

[Name of Applicant]
[Address of Applicant]
[City, State and Zip Code]


[Name of Lender]
[Address of Lender]
[City, State and Zip Code]

RE: Explanation of Declining Income

Dear [Name of Lender]:

I am writing this letter to explain my declining income from [YEAR]. At the time, my wife had just been diagnosed with kidney cancer. 

She had been laid off from work five months previously, which meant that our financial situation was already precarious.

Mine was the only income in the household. I was just barely keeping up with the usual bills after the loss of my wife’s income. 

When she became ill, our medical expenses skyrocketed. Her need for surgery and ongoing medication were critical, but our medical insurance was not sufficient to cover all of the expenses.

My wife’s surgery was successful, but a long recovery period was required. I did the best that I could to pay as many bills as possible. 

However, it soon became clear that I would be unable to cope. This led to our bankruptcy filing in [YEAR].

Things have improved since then. I have received annual raises, and my wife has fully recovered from cancer and has been able to go back to work part time.

Our credit history since the bankruptcy is relatively limited, but all of our bill payments since the bankruptcy discharge have been on time.

Thank you for your consideration of my loan application. You may reach me at [email address] or [phone number] at any time if you have questions.

Very truly yours,

[Signature of Applicant]
[Printed name of Applicant]
List of enclosures (if any)

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