Government Debt Relief

By: EconomyWatch Content   Date: 17 November 2009

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According to the statistics published by the Federal Reserve, the US citizens carried nearly $2.6 trillion of debt in 2007, or roughly $8,500 in debt per person. These debt liabilities included those from credit cards, mortgages and other lending tools. As the US families look for debt relief, government, state and federal agencies may help ease the load. However, the federal government debt relief programs do not completely absolve consumers of debts or offer a comprehensive solution. 

Benefits of Obtaining Government Debt Relief Grants

Some of the benefits of obtaining government debt relief grants are:

  • You can avoid resorting to the horrible option of bankruptcy.

  • Grants are a better option than debt relief. This is because through grants, debtor can become debt free instantly.

  • Since you have utilized government grant to repay all your creditors, your credit rating will improve drastically.

  • You are under no obligation to repay this money.

  • The grant money is both interest-free and non-taxable. 

Types of Government Debt Relief Programs

Consumers can use the following forms of government debt relief:

  • Student Loan Consolidation: Individuals struggling to repay one or more federal student loans can seek refuge in federal student loan consolidation. Through this program, you can consolidate your multiple loans into one loan with a lower interest rate and an easy monthly payment plan. However, this form of government debt relief can only be used for federal student loans. Student loans taken from private lenders cannot be consolidated under this program.

  • Mortgage Debt Relief: The government offers assistance for mortgage debt and for avoiding possible foreclosures. Following the subprime mortgage meltdown of 2007-2008, the US Department of Housing and Development (HUD) offers the FHASecure loan program to people facing the risk of foreclosure. 

Eligibility Criteria for Obtaining Government Debt Relief Grants

Government debt relief grants are easily available to people who can provide proof of their inability to pay off debts. Grants are issued only after the local social service office has thoroughly studied the following factors to ensure that the grant is going to someone who is needy:

  • Financial position

  • Outstanding debts

Repayment capability of the debtor

 


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