Ok, these are the steps to do Christina.
first, click on my link below and create a new hotmail account.https://signup.live.com/
Make sure to enter all you information accurately, incase you ever have a password XXXXX in the future.
Once you have created this account, on the iPad, go to Settings, Mail, press on the old Hotmail account, go to the bottom and press Delete Account.
Once it is deleted, go to Settings, Mail and you can now add the new hotmail account. It will then work.
If you have any problems, or would like any additional information or assistance, please do not hesitate to let me know.
And if you can take a second to rate my service, that would be greatly appreciated.