Debt & financial hardship

Card balances have grown fastest for people already struggling. Since 2023, average balances rose by more than 35% for people who said they were finding it difficult to get by.

Buy Now, Pay Later splits a purchase into smaller payments. In 2025, 16% of U.S. adults used it, and 11% of users had a payment trigger an overdraft or non-sufficient funds fee.

In 2025, 23% of adults with student loans had recent trouble making payments, and most of them said it was because they could not afford it.

Help with U.S. federal student loans is free through StudentAid.gov or your loan servicer. Be careful with companies that charge for “student loan relief”, as some may leave you worse off.

Not all debt is a loan. Many people fall behind on everyday bills. In 2025, 16% of U.S. adults did not pay all of their bills in the month before they were asked.

When debt feels too big, the mind wants to look away. But avoiding a valid debt rarely makes it disappear. Collectors may try other ways to get paid, including going to court.

A spending plan (or budget) is just a picture of your money. Seeing it on paper can calm the panic, because the problem becomes something you can look at instead of a cloud in your head. Planning regularly can help you feel more in control.

How to do it

1. Write down all the money coming in each month.
2. List the must-pays first: housing, food, power, transport.
3. Then list debts and other bills.
4. See what is left, or how much is missing.
5. Pick one or two small changes, and check in again next week.

Writing down every debt in one place helps you see which ones are most urgent and what to ask for when you call. It also stops surprises.

For each debt, note

• Any letters, deadlines or court dates
• How much you owe
• The monthly payment, and when it is due
• Who it is owed to, and their phone number

Keeping records helps if you ever need to dispute a bill or prove what was agreed. Write down who you spoke with and what was said, and ask for agreements in writing.

Keep together

• Bills and statements
• Letters from lenders or collectors
• Notes from every phone call
• Your lease or loan papers
• Written agreements

You don’t have to fix everything this week. Start with what keeps you safe and housed, and anything with a deadline. Then work through the rest.

Example

• Today: gather all bills into one folder
• Tomorrow: write them on one page
• This week: call the one that worries me most
• Next week: book a free counseling appointment

When you call, be ready to say

• Why you can’t pay right now (job loss, illness, cut hours…)
• How much you can afford to pay
• The new payment you are asking for, and for how long
• When you think you can go back to normal payments

Every time

• Write down the date, time and name of the person you spoke to
• Write down what was agreed
• Ask for any agreement in writing

If you are struggling with mortgage payments, contact your lender immediately. Waiting can lead to foreclosure. A HUD-approved housing counselor can give free advice: call 800-569-4287.

Try this

1. Have your notes and numbers in front of you.
2. Breathe in for 4, out for 6, five times.
3. Remind yourself: “I am asking for help. That is allowed.”
4. If it gets too much, it’s okay to say you will call back.

Debt collectors generally have to tell you who the debt is owed to, how much you owe, and how to dispute it. They must do this when they first contact you or within five days. If they can’t, it could be a scam.

Things to know

• Act quickly: for some requests, you only have 30 days from first contact.
• Don’t give out sensitive financial details until you know the caller is real.
• If the debt isn’t yours or you already paid, send proof.
• You can ask how the amount was worked out.

Under U.S. law, collectors may not harass, oppress or abuse you, and repeated or threatening contact is restricted. You can ask them to contact you at a different time or place.

The Consumer Financial Protection Bureau (CFPB) offers free sample letters. They can help you dispute a debt, ask for more information, ask a collector to stop contacting you, or say how you want to be contacted.

Tips

• Keep copies of everything you send and receive
• Send letters promptly
• Write down the date you sent each one

Collectors can’t sue over “time-barred” debts that are too old. But in some states, making a payment or agreeing in writing may restart the clock.

If a collector treats you unfairly, you can send a complaint to the CFPB at consumerfinance.gov/complaint. You can also contact your state attorney general.

Credit counselors can help you look at your whole money picture and talk through options. The National Foundation for Credit Counseling (NFCC) is a nonprofit that has been around since 1951. Its member agencies offer help with credit card debt, budgeting, housing and student loans. Visit nfcc.org to find a counselor.

Other places to look

• Credit unions
• Military personal financial managers, if you serve or served
• Universities and Cooperative Extension offices

Questions to ask

• What will you do to help me?
• How much will I have to pay?
• Do you have free education and information?
• Are you licensed to work here?

Look for one that

• Doesn’t charge before they help you
• Gives you fees in writing
• Has certified or accredited counselors
• Looks at your whole situation before suggesting anything
• Offers budget help and free materials

With a debt management plan, you pay money to a counseling agency each month, and it pays your unsecured debts, like credit cards. Plans usually take 48 months or more, may mean not taking on new credit, and don’t cover things like mortgages or car loans.

Some for-profit companies offer to settle debts for less. Stopping payments while you wait can add late fees, hurt your credit and lead to lawsuits. Creditors don’t have to agree, and savings may be taxable.

A debt settlement company is not allowed to collect fees before it settles or resolves your debt.

Scammers target people who are stressed about money. They often promise quick, easy fixes. If something sounds too good to be true, it usually is. In 2025, 20% of U.S. adults said they had experienced financial fraud or a scam.

Red flags

• A caller who won’t give details about a debt but wants payment now
• Asking for fees before they have done anything
• Claiming to run a special “government” program with guaranteed results
• Not explaining fees, timelines and risks before you sign
• Promising to make all your debts disappear, fast
• Telling you to stop talking to your lenders

If you get a bill you can’t pay

1. Ask for an itemized list and look for mistakes, double charges or care you didn’t get.
2. Check what your insurance should have covered. You can appeal if something looks wrong.
3. Ask the hospital about financial assistance.
4. Ask to lower the bill or set up a payment plan with no interest.

Financial assistance programs provide free or discounted care to people who need help paying their medical bills. Nonprofit hospitals must have these programs, and some states require more.

The No Surprises Act can protect you from owing the difference between what an out-of-network provider charges and what your insurance paid, in many cases. Some services, like ground ambulances, are not covered by it.

People in the Qualified Medicare Beneficiary program generally shouldn’t be billed for Medicare-covered deductibles, coinsurance or copays. Veterans facing hardship may be able to get repayment plans, copay exemptions or debt relief.

Be careful about using a credit card or a medical credit card to pay off a medical bill, as interest can add to what you owe. Unpaid bills can lead to late fees, collections and lawsuits, so it helps to act early.

A large U.S. study that followed young people into adulthood found that those who had been evicted had more symptoms of depression than those who had not, even after accounting for other factors.

What can help

• Call 211 for local rent and housing help.
• Don’t ignore notices. Read them, and note any dates and deadlines.
• Keep copies of your lease, letters and payments.
• Talk to your landlord early. Some may give you more time.

A HUD-approved housing counseling agency can offer advice to help you prevent eviction or foreclosure. Call (800) 569-4287 to find one near you.

Legal aid offices give free civil legal help to people who can’t afford a lawyer, including with housing. The Legal Services Corporation’s website (lsc.gov) lets you search by address for a legal aid office near you.

If you have children, tell their school what is going on. Schools can often help children keep going to the same school during a move.

Ways to help kids feel safe

• Keep familiar routines where you can
• Let them bring favorite things with them
• Tell them calmly that adults are handling it

When money for food is uncertain, the mind keeps coming back to it: planning, stretching, worrying. Research shows that money worries can use up mental “bandwidth”, making it harder to focus and make decisions.

Many people feel anxious, ashamed, irritable or low. Hunger itself can also make it harder to concentrate, sleep and manage emotions.

Many parents skip meals to protect their children, which adds exhaustion and worry. Tension at home can rise when everyone is stressed.

Children notice more than we think. Government health experts note that food-insecure children face higher risks of developmental problems, and that eating less, or less varied, food may affect children’s mental health.

Ways to protect kids

• Keep simple family routines, like eating together
• Let a school counselor know if your child seems worried
• Sign up for free or low-cost school meals
• Tell kids calmly that adults are handling it

SNAP provides food benefits to low-income households to help them afford groceries. Benefits come on an EBT card that works like a debit card at authorized stores.

How to apply

1. Apply in the state where you live: each state has its own form.
2. Contact your state agency online, by phone, or at your local SNAP office.
3. Complete an interview (usually by phone) and share proof of your information.
4. You should hear back within 30 days; some households with very little money can get help within 7 days.

WIC is for people who are pregnant, recently pregnant or breastfeeding, and for babies and children under 5. Parents, foster parents and anyone raising young children can apply for the kids in their care.

WIC offers

• Healthy foods like fruit, vegetables, milk, eggs and baby food, at no cost
• Nutrition advice and breastfeeding support
• Referrals to medical, dental and mental health care

You can find a nearby food bank by entering your ZIP code on Feeding America’s website. It shows partner pantries and meal programs, with hours and locations.

The USDA National Hunger Hotline connects callers with food banks, meal sites, government programs and other services: call 1-866-3-HUNGRY (1-866-348-6479), Monday to Friday, 8 a.m. to 8 p.m. ET.

You can also call 211 for local food help, any time.

Other places to ask

• Faith communities and community centers
• Your child’s school (many have family support staff)
• Your local library, for free internet, events and information

The Low Income Home Energy Assistance Program (LIHEAP) is run by each state. Depending on where you live, it may help pay heating or cooling bills, help in an energy crisis such as a shutoff, and offer low-cost home improvements.

Things to know

• Contact your local LIHEAP office, since rules and dates differ by state
• Ask your utility company and local charities about other help too
• LIHEAP generally does not pay water and sewer bills

Many people feel embarrassed using food banks or benefits. But food help is there for times like this, and millions of families use it. Using it can free up money and mental energy for rent, bills and your health.

Things people find helpful

• Bring a friend the first time you visit a pantry
• Once things improve, some people give back by volunteering
• Remember that volunteers often have been there themselves
• Think of it as a bridge, not a label

The basics

• Before filing, people generally must complete credit counseling from an approved agency within 180 days.
• After filing, people usually need to complete an approved course on managing money.
• Some debts are not wiped out, such as child support, alimony, certain taxes and certain student loans.

There are different types. Chapter 7 may involve selling some property, while Chapter 13 sets up a repayment plan over 3 to 5 years. Bankruptcy can stay on your credit report for 10 years.

The FTC describes bankruptcy as a last resort because of its long-lasting effects. Talk to a qualified attorney or a legal aid office about your own situation before you decide.

Ideas

• Focus on the fresh start, one step at a time
• Look for free legal aid if you can’t afford a lawyer
• Remind yourself: this is a legal tool, not a judgment of your character
• Talk to someone you trust about how you feel