Hardship relief programs provide assistance to individuals, businesses, or families facing financial issues. These temporary assistance options can serve as a safety net for individuals struggling with compounded credit card bills, business debt, tax debt, student loans, or any other unfulfilled financial obligations. Hardship programs are offered by governments, non-profit organizations, utility companies, lenders, local communities, and private organizations. However, these lenders offer their financial services to those who meet their eligibility criteria.

Common qualifying factors

Financial providers evaluate an applicant’s qualifications on a case-by-case basis. The primary concern is to review whether the applicant can meet their basic requirements and maintain their living standards.

Low income

To qualify for a hardship relief program, applicants must have an income below a specified standard. There is no fixed number to qualify for the program; eligibility is determined on a case-by-case basis based on family size and location. The IRS utilizes Collection Financial Standards to calculate the amount and determine whether the income is sufficient to cover the individual’s or family’s basic expenses. 

Low disposable income

Those with little to no disposable income may be eligible for a hardship relief program. The IRS calculates the applicant’s net income relative to their monthly expenses. If the amount remaining is zero or close to zero, the eligible individual can apply for the programs. 

Limited liquid assets

An applicant’s bank balance, properties, and investments are evaluated in order for them to qualify. The IRS verifies whether the applicant has liquid assets to address their financial hardships. If not, they qualify for the relief grant. However, if, according to the IRS’s calculations, the applicant has enough assets to liquidate, they can be disqualified from the program. In that case, the program expects applicants to use their assets to overcome their hardship and clear debts.

Employment status

Certain instances or conditions that have affected the applicant’s ability to earn income may qualify them for a hardship relief fund. This includes instances such as disability, job loss, or other conditions that affect an individual’s earning capacity. These factors are considered when the IRS evaluates the applicant’s eligibility for the program.

Unexpected expenses

Medical expenses can also affect the applicant’s eligibility for a financial hardship relief program. If the applicant is spending a significant amount of money on medical expenses or other unforseen health-related expenses, it might strengthen their case for hardship relief benefits.

Existing debts

Applicants of IRS hardship programs may have their financial obligations reviewed. The IRS can review their commitments, such as child care, health care, car loans, and other existing debts, to verify their eligibility. If these factors make other payments questionable or affect the applicant’s ability to meet basic standards of living, the applicant can qualify for the programs.

Types of hardship relief programs

Rent and housing

State and city governments offer grants to applicants who are in need of housing assistance. These financial solutions help cover late payments, rent, or some other emergency housing needs. The program can also help applicants connect with local agencies to seek short-term assistance.

Utility hardship

Like other departments, most utility providers offer hardship payment plans and programs. This includes water, gas, and power providers. These utility-based programs can help delay the shut-off periods, reduce outstanding payments, or offer a special rate for low-income users. Applicants can easily apply and qualify for these hardship assistance programs.

Medical bill assistance

Several healthcare centers, including clinics and hospitals, have a system in place that allows those in financial hardship to seek treatment with financial aid. Those in need should contact the billing department to learn about the center’s hardship payment plans and charity care programs. 

Food and essentials

Federal, state, or local programs such as Supplemental Nutrition Assistance Program (SNAP), Women Infant Children (WIC), and The Emergency Food Assistance Program (TEFAP), local food pantries help applicants and their families cover basic needs of food and similar essentials.