Financial Hardship Loan Scams Leave Victims Worse Off, Blog | TNS (2024)

FAQs

Are financial hardship loans real? ›

Hardship personal loans are a type of personal loan designed to help borrowers overcome financial difficulties. You may face financial difficulty for a number of reasons, such as a medical emergency, car repairs, or a job loss. Hardship personal loan programs are offered by many small banks and local credit unions.

Is the Financial Hardship Program Legitimate? There is no official United States government agency or organization called the “Financial Hardship Department.” But with credit card debt reaching an all-time high of $930 billion, unrelenting scammers want you to believe that such an entity exists [*].

Go ahead with a fraud alert or credit freeze and report your information stolen at the FTC's identitytheft.gov website. Be on guard for scams that claim your social security number is linked to back taxes or other debts. Independently verify claims with the IRS or creditors before paying any money.

When you give a hardship notice (for the first time in any three-month period) the lender must stop further enforcement or legal action until it responds. This requirement does not apply if the creditor has a court judgment . Your creditor can ask you for more information. The information must be relevant.

Hardship loans can help you cover a well-known list of unexpected costs: emergency medical care, home repairs and other necessities. Thoroughly research available hardship loans to find an option that best fits your situation.

How long does financial hardship information stay on my credit report? Your repayment history stays on your credit report for 24 months. Financial hardship information - both temporary or permanent arrangements - only stays for 12 months.

Founded in 2008, National Debt Relief is a debt settlement company that negotiates the reduction of unsecured debt. If you have over $7,500 in unsecured debt, NDR may be able to cut that amount in half.

Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief. In fact, if you receive a solicitation that touts a government program to get you out of debt, you may want to think twice about working with that company.

Your credit report will also include information that indicates you are in a financial hardship arrangement. This information will stay on your credit report for one year and then disappear. Your credit report will not include the reason for your financial hardship arrangement.

Scammers are masters at hiding their identities. But the more information you can gather, the better chance law enforcement will have of tracking them down. Ideally, you'll want to save any conversations, and write down notes and details that could help pinpoint the fraudster's true identity and location.

Can the police do anything about a scammer? ›

Legal Recourse and Justice: The police can initiate investigations that may lead to arrests and legal action against the perpetrators. This not only brings about justice for victims but also serves as a deterrent for would-be scammers.

The easiest way to become a victim of a bank scam is to share your banking info — e.g., account numbers, PIN codes, social security number — with someone you don't know well and trust. If someone asks for sensitive banking details, proceed with caution.

you are unable to meet reasonable and immediate family living expenses that are due to be paid.

Key Takeaways. A hardship withdrawal from a 401(k) retirement account is for large, unexpected expenses. Unlike a 401(k) loan, the funds need not be repaid. But you must pay taxes on the amount of the withdrawal.

Financial hardship can make paying debts and everyday expenses impossible for those without enough income or savings to cover their bills. Financial difficulties can be triggered by a variety of circ*mstances, including: Illness. Injury or disability.

You can receive no more than two hardship distributions during a plan year (calendar year for all Guideline 401(k) plans). The amount requested may not be more than the amount needed to relieve your financial need, but can include any amounts necessary to pay taxes or penalties reasonably anticipated.

Emergency loans are personal loans you use to pay for urgent, unexpected expenses such as medical care or home repairs. These loans are usually funded fast, and lenders can approve consumers with bad credit scores (typically between 550 and 629). Compare. 35+ personal loans reviewed and rated by our team of experts.

To make a 401(k) hardship withdrawal, you will need to contact your employer and plan administrator and request the withdrawal. The administrator will likely require you to provide evidence of the hardship, such as medical bills or a notice of eviction.

There are no definite limits on the number of hardship withdrawals an employee can take in a year, but they'll be limited to whether they'll be approved for one and whether their 401(k) has enough money to cover the withdrawal. Also, some 401(k) plans may have even stricter guidelines than the IRS.