What is Financial Hardship?
Financial hardship is a commonly used term. There are a variety of situations where you may claim financial hardship, but you must be prepared to prove it. Also, many social assistance programs are set up for people who cannot afford necessities.
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Definition
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Financial hardship means that you are suffering "extreme privation" and "suffering" because you don't have enough money. Basically, you don't have the money necessary to provide the basic comforts and necessities of life.
Misconceptions
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Financial hardship must be extreme and involuntary to qualify. Not having the car or shoes you want is not financial hardship. Not having money to feed your children or pay your water bill to prevent having your water shut off is.
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Unable to Pay
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You may be able to get help when you can't pay a bill or obligation. Student loans can be deferred due to financial hardship. IRS payments and mortgage programs can be appealed. You can even attempt to recoup overpayment of Social Security benefits.
Accessing Benefits
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Financial hardship allows people to claim extra benefits, such as food stamps and HUD rental assistance. 401(k) accounts allow early withdrawal in cases of extreme financial hardship as well.
Considerations
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When facing a financial hardship, always assume there is help available. Each agency has a different definition of hardship, so you may be eligible for some programs and not others.
Letter of Hardship
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A letter of hardship is usually helpful when requesting relief of a debt or obligation. Detail your financial concerns, what happened to cause your situation, what you are asking and how you plan to get back on track.
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References
Resources
- Photo Credit Image by Flickr.com, courtesy of Beverly
