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What Does The Term Financial Hardship Mean?

Bankruptcy Lawyers

What Does The Term Financial Hardship Mean?


Throughout recent years, we have seen one of the worst worldwide financial recession’s mankind has ever lived through. Hundreds of thousands of people lost their jobs, several lost everything they owned. Now that the recession is over, many people are finally making it back onto their feet. As they try to get financially stable again, many people realize the mountain of debt that they created while trying to survive through the recession is just too much to handle. No matter how much money they seem to make, they do not seem to make a debt in their debts. This is where thoughts of bankruptcy come in.


When speaking with a Galena Park bankruptcy lawyer, you will learn that you are going to need to provide proof of a financial hardship, but what exactly is a financial hardship? Well, your Galena Park bankruptcy lawyer will explain this in incredible detail. However, here’s a simple breakdown of what a financial hardship is and how to prove one.


Financial Hardship Definition: A financial hardship is a period of time when a consumer is not making enough money to survive. Financial hardships are measured on an income to expense ratio. Therefore, if your income doesn’t meet with your expenses or you have nothing left at the end of the month after paying all of your expenses, you may be facing a financial hardship. Hardships must be proved with reasonable cause such as illness or unemployment.


How to Prove A Financial Hardship: Proving a financial hardship could prove to be a more difficult process than you expect. First, you’re going to want to sit down and think about what actions caused you financial hardship. Did you experience an illness that caused you to miss work or increased your expenses by adding more medical expenses to what you already pay? Did your job cut hours or lay you off. Anything that would drastically alter the financial well being of your household could be the reason for your financial hardship.


Next, you want to take note of all household expenses and income that you have. Your Galena Park bankruptcy lawyer is going to need to know exactly what he or she is working with. This is done on a spreadsheet using Microsoft Excel or Google Drive Spreadsheets. List all of your expenses and their amounts including everything from housing to food, utilities, loan payments, phone bills, medical expenses, child care expenses, ect… You want to make sure that your list includes every last expense you have. Now, make a list of all income sources that you have. This could include anything from your salary to side work, investment income and anything that brings in money on a regular basis.

Once you’ve done all of this, subtract your total expenses from your income. Do you come up with a negative number? If so, you’re experiencing a financial hardship. Even if you come up with a low positive number, you may be experiencing a financial hardship.

Please visit our website for more information about us and bankruptcy.

Call us today at (713) 974-1151 to schedule a no-obligation consultation or feel free to email us at [email protected].



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Michael Busby is a Houston divorce lawyer who has been in practice for over 20 years and appears daily in the Family Law Courts of Harris County and Fort Bend County Texas

Busby & Associates , have two Houston Offices, one in Chinatown, Houston Texas and another in Independent Heights, Houston, Texas. Michael Busby is Board Certified in Family law by the Texas Board of Legal Specialization.