Low Income Debt Relief Resource Guide: Where to Get Help

Financial Help for
Low Income Americans

Low Income families in a financial crisis often gravitate toward high-risk solutions. Find out how to avoid debt and build wealth. 


About Financial Help for Families

Debt can be challenging for anyone, even people in financially stable households, but it’s especially daunting for low-income families.

What is the low-income financial life all about? Well, there’s not a debate on where to vacation this summer. There’s not a consideration of what color grout to use with the new tile. There’s not a thought about which new car to purchase.

Mostly, it’s a paycheck-to-paycheck existence — no thoughts of a retirement plan, no savings, no college funds for the children … basically, no getting ahead.

Mostly, it’s doing without any sort of luxury item and struggling to afford the necessities and pay bills on time.

Mostly, it’s about survival and avoiding the plunge into credit card debt.

What is a low-income family?

Here are the new 2018 low-income limits from the Department of Health and Human Services (HHS). Alaska and Hawaii have different figures to reflect the cost of living in those states.

Low Income Definitions as of 2018

48 contiguous states and the District of Columbia, as follows:

  • 1 person household — $24,158.60
  • 2 person household — $32,755.40
  • 3 person household — $41,352.20
  • 4 person household — $49,949.00
  • 5 person household — $58,545.80
  • 6 person household — $67,142.60
  • 7 person household — $75,739.40
  • 8 person household — $84,336.20

Low income definition for Alaska

  • 1 person household — $30,208.20
  • 2 person household — $40,954.20
  • 3 person household — $51,700.20
  • 4 person household — $62,446.20
  • 5 person household — $73,192.20
  • 6 person household — $83,938.20
  • 7 person household — $94,684.20
  • 8 person household — $105,430.20

Low income definition for Hawaii

  • 1 person household — $27,780.40
  • 2 person household — $37,670.70
  • 3 person household — $47,561.00
  • 4 person household — $57,451.30
  • 5 person household — $67,341.60
  • 6 person household — $77,231.90
  • 7 person household — $87.122.20
  • 8 person household — $97,012.50

The income figures are based on poverty levels determined each year by the Census Bureau. There are “poverty thresholds,’’ which are used mainly for statistical purposes, and “poverty guidelines,’’ which are issued in the Federal Register by the HHS. The poverty guidelines are used for administrative purposes, such as determining financial eligibility for federal programs.

The 2018 poverty guidelines, released on Jan. 18, were calculated by taking the 2016 Census Bureau’s poverty thresholds and using the Consumer Price Index to adjust for price changes between 2016 and 2017.

Families are designated as “low income’’ if they earn at or no more than 199% of the poverty level. For example, in the contiguous 48 states and the District of Columbia, a four-person household can earn no more than $25,100 to be considered at the poverty level.

So, for the federal government to consider a four-person household as “low income,’’ it must fall in the category of earning between $41,352.21 and no more than $49,949 (1.99 multiplied by $25,100, the poverty level for a four-person household).

At the last U.S. Census in 2010, nearly 146.4-million Americans (or nearly half the population) were at or below the low-income level. In 2010, there were 97.3-million low-income Americans (with two-thirds of those earning just enough to put them above the poverty line) and 49.1-million Americans living at or below the poverty line.

Being designated as a low-income family could mean qualification for some federal initiatives, such as taking part in the U.S. Department of Housing and Urban Development’s public-housing program. But that depends on where you live. You can qualify for low-income housing if you earn no more than 80% of the median income level for your county or city. By earning 50% of that median income level, you would meet HUD’s lowest low-income limit.

How to Pay off Debt with Low Income

At the low-income level, there’s obviously not a lot of wiggle room. But with some resourcefulness, hard work and imagination, families can maximize their money, set and track financial goals.

Here’s the money quote.

Paying off debt is rarely about how much money you make. Its about managing the money you have.

Got that?

There are actually many high-income earners who live paycheck-to-paycheck as well.

For low-income families, though, here are some tips that will have you well on your way to managing the money you have.

  • Get the Right Mindset It might take you longer to pay off a debt, but it’s definitely not impossible. You will probably need to scrutinize where every dollar goes. You might need to open a few new revenue streams. Many people have done this before you — and many were in worse shape when they started. But if you remain positive and diligent, good things will happen.
  • List All Your Debts Simple stuff. Get out the legal pad. Figure out how much you owe. Hide nothing. This is a simple accounting of where you are starting.
  • Keep Track Of Your Money Even when people can barely rub two nickels together, they often have no clue where their money is going. You must chart your spending for 30 days, whether you use a note-taking app on your phone or a little notebook that you carry around. Either way, you must record every single purchase — no excuses. This will give you a picture — maybe for the first time — of where your money flows each month.
  • Make A Detailed Budget This will help you to identify how much you have remaining each month to pay off your debts. Next, take your total debt and divide by the amount you have remaining each month. Now you roughly know how many months are needed to pay off your debt. Example: If you have $12,000 in credit-card debt and you can afford $400 each month toward paying it down, you will need roughly 2.5 years to pay off that debt (provided you don’t keep spending on that credit card — an advisable strategy, by the way).
  • Accelerate the Payoff OK, we already know your first concern. What if I don’t have much (or any) money at the end of the month for my debt? Then you must get creative and probably make a few sacrifices.
  • Sell Some Stuff: Neighborhood garage sale, eBay, Craigslist, Facebook Marketplace … you name it. Get some cash for the stuff you aren’t using and really don’t need. We all can do it.
  • Earn Extra Income: Bringing in an extra $50 or $100 a month will help you pay down the debt much faster. With the Internet, you can run a business from your home. You can become an Uber driver or Amazon flex delivery person. Check out the best side hustles and find one that works for you.
  • Cut Your Expenses: Cut the cable. Get rid of the home phone. Say bye-bye to Starbucks (at least a few days a week). When examining where your money is spent, you will inevitably discover places for cutbacks.
  • Become A Great Employee: You could work yourself into position for a raise or promotion. But you must become more valuable to your employer. Maybe you could get more certifications or training. Always volunteer for the jobs no one else wants and your reputation as a “go-to person’’ will be enhanced. Work on your skills and embrace all technology.

Establishing and Maintaining Credit

Among the many challenges for low-income families: Establishing a credit history and maintaining good credit.

In 2015, the Consumer Financial Protection Bureau (CFPB) estimated there were 26-million Americans who were “credit invisible’’ or had no credit at all. Lacking a credit history, low-income consumers either won’t get approved for a credit line or they will face much higher costs to use credit for things like purchasing a home or car, than consumers with established credit histories.

Higher-income consumers obviously possess more money, better lifestyles and more luxury items, but they also have more ways to get and keep good credit.

The CFPB said low-income consumers are 240% more likely to start their credit history with negative records, such as a debt collection. Higher-income consumers likely can begin with positive records, such as opening a credit card or getting a good credit co-signer.

In 2016, the CFPB said that 26% of people under the age of 25 began their credit history by establishing student loans, which have a much higher balance and are treated differently than revolving credit-card debt. That figure was up from 10% just a decade earlier in 2006.

Resources for Low Income Families

Whether you are retired, underemployed or having a bad run of luck, day-to-day living can be challenging with a low income. But there are scores of resources that can be helpful in all areas of life.


Federal Student Aid — The site details the types of grants and scholarships available.

QuestBridge — It has information on resources for high-achieving low-income students, plus resources for educators.

The Education Trust — It advocates for students with high academic achievement, especially those in low-income situations, and offers a number of tools, including one to help in choosing a college based on performance.

Bloomberg Philanthropies — It helps high-achieving students who are low- and moderate-income.

FinAid — It provides information on educational loans, scholarships and military aid, as well as several dozen financial calculators, plus tips on choosing a college, options for online degrees, jobs and internships and more.

JKCF — The Jack Kent Cooke Foundation site has scholarship, grant and other info intended for “exceptionally promising” students from low-income families.

First Generation Student — This site caters to low-income students, offering tips and information about finding and paying for degrees at reduced cost.

GoCollege — The linked page has info on grants for low-income students, while the overall site has info on financial aid in general, college admission, a college survival guide and more.

Food And Health

HealthCare.gov Subsidy Info — This page on the HealthCare.gov site provides an income range table for determining if a household is eligible for lowered health insurance rates.

AARP Healthcare — The American Association for Retired Persons Healthcare site provides info for low-income healthcare resources such as SHIP (State Health Insurance Program), ECA (Eye Care America), HRSA (Health Resources and Services Administration) and offers a Community Health Center Locator service.

U.S. FNS — The Food and Nutrition Services (FNS) branch of the USDA has a number of food assistance programs including WIC (Women, Infants and Children) and SNAP (Supplemental Nutrition Assistance Plan).

Medicaid — Medicaid.gov provides all the information you could need regarding Medicaid, CHIP (Childrens Health Insurance Plan) and other health-related programs.

Food Research and Action Center — FRAC (Food Research and Action Center) publishes information about initiatives, federal food/ nutrition programs, state initiatives and data and publications relating to hunger and poverty.


Need Help Paying Bills — It provides a wide range of links to state and local assistance programs, debt counseling, charity assistance, health care and more.

Disability.gov – Financial Help — This is Disability.govs Guide to Financial Help for Low-Income Individuals and Families.

InterConnection – Low Income Online Store — This page on the InterConnection site (a nonprofit) offers discounted computer equipment for sale for qualified low-income shoppers.

Benefits.gov — This page of the Benefits.gov site has by-state links to information about various types of federal benefits, with additional options to search by category or agency.

USA.gov — The U.S. government provides a long list of assistance programs on this Benefits page, with categories including health and nutrition (SNAP, medicaid, medicare), job and unemployment (EITC, SS, UI, Training), education (loans, school meals) and more.

Seniors Resource Guide — This page of the Seniors Resource Guide lists federal, state and local options for low- to moderate-income seniors.

CAEL — This page of the CAEL (Council for Adult and Experiential Learning) site outlines initiatives for providing people of low-income or who are unemployed with job training and education.

MyCreditUnion.gov – Low Income Credit Unions — This page of the MyCreditUnion.gov site provides information on a variety of Credit Unions (LICUs, CDCUs) suitable for members with low-income.

DMV.org – Low-Income Car Insurance — This page of the DMV.org site (not associated with the U.S. Department of Motor Vehicles) provides information about states that have government-sponsored car insurance for low-income families.

Frugaling.org – My Low-Income Lifestyle — This article on the frugal living blog Frugaling.org offers a detailed account of how one person copes with living on a low income.

WiseBread – Top 100 Frugality Blogs — WiseBread, a top personal finance and frugal living blog, offers a useful list of the top 100 frugality blogs and sites based on multiple calculated factors — all of which offer valuable tips on stretching the dollar, saving money and building wealth.

Welcome to USA — This page of the Welcome to USA site has information and links to to multiple government benefits, including medicare, medicaid, CHIP, SSA, SSI, SNAP, WIC, TANF and more.

Suntopia — It has large database (more than 21,000 programs, nearly 26,000 cities) of social service programs in all 50 states for individuals and families.

WPFP — The Working Poor Families Project (WPFP) publishes reports and articles about the increasing economic divide in the United States, as well as links to relevant organizations and resources.

Ascend — Ascend at The Aspen Institute works towards helping parents and children “educational success and economic security” by highlight ideas and collaborations in that vein.

Aidpage — It’s a support network where people can anonymously share tips and advice to help each other through difficult times.

CLASP – College Student SNAP Eligibility — It focuses on policy for low-income Americans, and this page outlines SNAP (food stamps) eligibility criteria for students.

IRS.gov Taxpayer Advocate — This page of the Taxpayer Advocate Service site (of the IRS) offers LITC (Low Income Taxpayer Clinic) and eligibility information for low-income taxpayers seeking assistance in resolving a tax dispute with the IRS. It has a state map interface for easier search.

FCC.gov Lifeline — The linked page on the FCC.gov site has info for affordable telephone service options for low-income subscribers under the Lifeline program.

AARP — The American Association of Retired Persons) Low-Income Assistance page has links to articles on the site about tax help, income assistance and other ways to expenses.


NLIHC – Resource Library — The National Low-Income Housing Coalition Resource Library offers publications, tools, research and reports related to advocacy work on housing programs for low-income families.

HUD.gov — This page of the U.S. Housing and Urban Development site covers rental assistance and has links to information on rights and responsibilities for tenants, while other pages have information on affordable housing.

U.S. OCC LIHTC — This page of the U.S Department of the Treasurys Office of the Comptroller of the Currency site has information on low-income housing tax credit program plus links to various housing organizations.

U.S. OCS LIHEAP — This page of the U.S. Office of Community Services provides information about LIHEAP (Low Income Home Energy Assistance Program), while the overall site covers others state and community programs to assist low-income families. Also see http://liheap.org/ to learn about the fight to keep LIHEAP funding from declining.

ShelterListings.org — It has information by state for finding low-income, low-cost and supportive housing; homeless and day shelters and halfway housing.

Energy.gov WIPO — It has information about assistance for weatherization and energy bills for low-income families.

LowIncomeHousing.us — It offers a map-based interface to search for affordable housing options across the United States for low-income individuals and families.

Community Power Network — This page from Community Power Network has information about solar power for low-income communities, the politics surrounding the situation, and the benefits.

StartSleeping.org – This resource provides listings for shelters, based on your location, helping those who are homeless find a warm, safe place to sleep.

Women and Families

Single Mother Guide — It lists many resources for single mothers as well as statistics on single parenting.

Single Mother Help — It has a variety of information on tax, grants, assistance, education and job programs and initiatives for single mothers.

NWLC — The National Womens Law Center monitors laws and policies favoring women and families, and has a Poverty and Income Support section that contains articles and reports about available family support programs, family tax credits and more.

Single Mommie — It lists a variety of resources for single mothers, including grants, scholarships, information on financial help, housing, government programs and more.


NA, (2018, 18 January), U.S. Department of Health and Human Services Poverty Guidelines. Retrieved from: https://aspe.hhs.gov/poverty-guidelines

Ogunjimi, A., (2010, 10 November), What Is The Difference Between Low Income Families and Poverty Families? Retrieved from: https://www.sapling.com/7481624/difference-income-families-poverty-families

NA, (2017, 7 June), Consumer Financial Protection Bureau Study Finds Consumers In Lower-Income Areas Are More Likely To Become Credit Visible Due To Negative Records. Retrieved from: https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-study-finds-consumers-lower-income-areas-are-more-likely-become-credit-visible-due-negative-records/

Wesby, M., (2015, 17 August), Why The Rich Stay Rich And The Poor Stay Poor. Retrieved from: http://www.newsweek.com/why-rich-stay-rich-and-poor-stay-poor-363611

Acuff, K., (2017, 13 June), Define A Low Income Family. Retrieved from: https://www.livestrong.com/article/206990-define-a-low-income-family/

Cabler, J., (2017, 10 December), How To Pay Off Debt When You Live Paycheck To Paycheck And Have No Money. Retrieved from: https://www.cfinancialfreedom.com/pay-off-debt-paycheck-to-paycheck-have-no-money/

NA, (ND), 50 Resources For Coping On A Low Income. Retrieved from: https://www.topcounselingschools.org/lower-income-resources/