For individuals and families on the brink of bankruptcy, government grants can provide an option to lighten the burden of medical bills, support a foundering small business, or assist in home improvements after a natural disaster. However, they are not a panacea, and will rarely provide cash for personal spending or paying down credit debt. As the federal agencies' grant application website explains, “Grants.gov does not provide personal financial assistance.” Instead, these grants can help individuals with specific problems try to tackle the issues that have pushed them into dangerous financial straits.
Unemployment Benefits and Medical Grants
Job losses often can trigger a family’s spiral into bankruptcy, but unemployment benefits can help cushion the blow. The accompanying loss of employer-sponsored health insurance after a layoff can cause further economic burdens. According to a study at Harvard Medical School in 2003, medical problems contributed to almost half of all bankruptcy filings. The Labor Department offers recommendations about how to handle medical bills after a layoff. Individuals can apply for assistance through programs like Medicaid, a state-federal health insurance program for low-income people, families, and children, the elderly, and people with disabilities.
Natural Disaster Grants
Sometimes families find themselves on the brink of financial ruin as a result of a natural disaster that causes damage to their homes or businesses. Grants for improving areas hit by hurricanes, wildfires, or other types of disasters are provided through the Federal Emergency Management Agency and other federal agencies. After Hurricane Katrina, the National Park Service’s Hurricane Disaster Relief Grant program made grants to homeowners ranging from $5,000 to $45,000 to help mitigate damage to their homes.
Small Business Grants
For business owners on the verge of financial collapse, there are grants available through the Small Business Administration that may help businesses get going or recover from a financial slump. Through the American Recovery and Reinvestment Act of 2009, additional grant money has been made available to support specific types of businesses, including ones that involve overseas exports, mentor at-risk youth, serve rural communities, and involve pollution control or recycling. Additional small business grants may provide financial assistance to veterans, minorities, women, and people with disabilities.
Beware of Scams
Unfortunately, people on the verge of bankruptcy are often the target of scams that promise thousands of dollars in federal grant money with few strings attached. Companies may charge steep fees to provide lists of grants that people can apply for, when this information is available free through various federal government websites. It is usually worthwhile to double-check that websites promising access to federal grants have an address with a .gov ending.
Rachel Breitman's articles about politics, law and entertainment have appeared in "American Lawyer," "USA Today" and Reuters. She holds a Master of Science in journalism from Columbia University and a Bachelor of Arts in English from Swarthmore College. She is also a middle school English teacher and new mom.