Financial Hardship: Full Guide to Programs and Variations

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Anyone who wants to pay their bills on time, but doesn’t have the financial means to do so is considered to be in financial hardship. As you might imagine, this comes in a number of forms. You might have just lost your job or faced an unexpected medical crisis. You might be living paycheck to paycheck and you’re unable to make ends meet. 

No matter your situation, you might be eligible for financial hardship programs. These programs are offered by a number of sources, from credit providers to utility services. 

The goal of these programs are to help you get back on your feet so you can resume making normal payments sooner rather than later. As long as you contact your providers during the proper time frame and you have proper documentation of your hardship, you can take advantage of these programs and their variations. 

What to Expect From a Financial Hardship Program

Whether you’re indebted over your head or you’ve only recently struggled to make minimum payments, you can get help with a financial hardship program.

What is a hardship program? As we mentioned before, it’s a way to get you back on your feet. Your lenders, as well as your utility services, want you to remain in good standing so you can continue to make payments. Oftentimes, any payments are better than no payment. 

With a hardship program, the lender throws you a lifeline that you can use to get your money back in order. This is a win/win for both you and the lender or service provider. It’s a win from you since you can avoid the lender taking action against you, and a win for the lender who doesn’t have to dedicate the time and expense to escalating the situation. 

Depending on your situation, here’s what you can expect from a financial hardship program:

  • Deferred payments for a set period of time
  • Lowered monthly payments (either temporarily or long-term)
  • Changed payment terms
  • Audit of your usage (in the case of services or utilities)

If you pair one of these programs with proactive action and budgeting, you will successfully recover and get back on your feet without any long-term damage to your credit score. 

Types of Hardship Programs

There are a number of hardship programs available. The type of program you choose will depend on factors such as your current debt, how much you can afford to pay each month, and which bills you’re struggling with. 

The most common types of hardship programs include:

  • Credit hardship – These are offered by credit providers and will vary by lender. These are usually available for mortgage lenders, auto lenders, and even consumer credit like credit card companies. 
  • Utility bills – Utility companies that provide things like gas, electricity, and water are required by law to offer hardship programs to help make payments more affordable to your current situation.
  • Phone and internet – Similarly, phone and internet providers are required to also have processes to help people experiencing financial hardships. The most common type of assistance is allowing extra time to pay your account or offering a new service plan. 
  • Household bills – Finally, many local councils have hardship assistance programs for those struggling with household bills and debts not included above. 

If none of the above programs fit your situation, talk to your lenders directly. You might be surprised by what options are out there if you’re willing to take action quickly. 

How to Take Advantage of a Hardship Program

Once you’re in a situation where you’re unable to pay a bill on time, it’s time to look into financial hardship programs. To begin, ask the most important question: how much can you afford to pay?

It is a good idea to create a budget that’s customised to your current income and expenses. Figure out just how much you can afford to pay based on these calculations. At the same time, collect any documentation showing your current income, debt, and other bills. This will be helpful when you apply for these programs. 

Next, it’s time to take action. You can contact your lenders directly and ask to be directed to their financial hardship department. While asking this can be intimidating, don’t be embarrassed. Customer service should be able to help, and they’re used to hearing these types of requests. Be firm but kind in your discussion, and explain your current situation so they have more perspective and understanding of why you’re seeking assistance. 

You’d be surprised just how willing many lenders and utilities are when it comes to working with you on the right temporary plan. Remember, these providers just want to get their money! They can only reach this goal by working with you rather than against you.

Create a Financial Hardship Program Plan

If you’re not sure where to begin when it comes to your current financial situation, talk to the experts. The specialists at Debt Busters have over 15 years of experience helping others reclaim their footing with financial hardship programs. 

You don’t have to face your lenders alone. We’re here to help. Check out our informal payment arrangements where we contact your creditors and set up hardship arrangements on your behalf. Contact Debt Busters today on 1300 368 322 to start the process and build a brighter financial future. 

Financial hardship programs exist for a reason! Don’t be afraid to use them when you need to.

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Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

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