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What is Considered Financial Hardship?

If you are having trouble making ends meet, you might be able to ask your lender or credit card

companies for assistance. Oftentimes, writing a hardship letter to explain the details of your

situation can help your case.





What constitutes a hardship?

How do you know if you are experiencing financial hardship? The IRS defines “hardship” as when

you are not able to pay for allowable living expenses.


“Allowable living expenses” are the day-to-day things you need to take care of your family. These

expenses include:

1. Food

2. Housekeeping supplies

3. Apparel and services

4. Personal care products and services

5. Miscellaneous


Another way to look at it: If what you owe each month is more than what you earn, you are

experiencing financial hardship.


There are many different situations that can lead to financial hardship —

Losing your job, work cutbacks, or reduction in pay


These are the most common reasons for financial hardship. If you or a contributing member of your

household loses their job, your finances can take a big hit. If you work an hourly job and your hours

have been significantly cut, this can also qualify. Or, perhaps you got a new job, but it pays far less

than your previous job. Even though you are employed, this can be treated as hardship.

If you are a business owner or are self-employed, a decline in business and revenue is also

considered financial hardship.


Divorce or separation

Besides the legal fees, taking over sole responsibility for mortgage payments and other household

expenses can be overwhelming with only one income. Add shared debt and child support, and the

expenses can stack up quickly.


Illness or injury

Medical bills associated with serious conditions such as cancer or a heart attack, or even the

slower onset of symptoms of Alzheimer’s disease or diabetes can take a significant toll on

finances.


Death

Funeral costs due to a death in the family can put a serious strain on finances.


Disaster

Natural disasters and acts of God, as well as fires or car accidents can cause thousands of dollars

of damage.


Legal problems

If you or a family member is involved in a costly litigation or is incarcerated, it can have a

devastating effect on your finances.


If you have exhausted all other options to get out of hardship, you may look at selling your home

and downsizing to a cheaper living situation to alleviate some of the financial stress. Cash For

Homes Austin is an Austin-based investor with local experience that pays cash for your home. We are willing to offer a fair market price on your home, and pay cash for your home in days rather than weeks.

Contact us for a consultation today.

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2800 E. Whitestone BLVD
Suite 120 #53
Cedar Park, Texas 78613
512-560-5183
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