Debt Relief Grants from the Government

Regardless of what you may have seen or heard on the internet or anywhere else, the US government does not offer grants for individuals to pay off their debts. Most of the advertisements you see are firms selling bankruptcy, debt consolidation or debt counseling services. And while bankruptcy rules are under the purview of the government, bankruptcy is not a grant program.

You can get help if you are drowning under the weight of student loans or mortgage foreclosure threats. However, these programs have strict regulations and are in not in any way debt relief grants.

Bankruptcy

Bankruptcy is an option to start over but it is not a government grant when the debts are discharged. The creditors are the ones who have to eat that debt.

The government has also tightened bankruptcy rules. For example, if you seek bankruptcy relief, you will have to go through debt counseling before and after the bankruptcy. Also, with Chapter 7 bankruptcy you might have to surrender property to liquidate debt. With Chapter 13, you can keep your property as long as you meet the payment schedule. However, that means you have to be bringing in enough income to make the monthly payments.

Other Options

There are options other than bankruptcy to get out of debt. You can do one or more of the following:

Debt Counseling: You can visit a debt counselor. They will often work with you and your creditors to develop a repayment plan in exchange for a small fee. They will try and lower your interest rates and consolidate your loans into one lump sum with an affordable monthly payment.

Debt Consolidation: You might want to take all of your high interest credit cards and other loans and consolidate them into a lower interest rate loan. For example, you can make minimum payments of $339 each month on 29.99% interest rate loans and it would take 31 years to pay off $10,000.

That same $10,000 could be repaid at $207 per month in just five years if the interest rate was set at 8.99%.

However, only if you have good credit will you get the good interest rates.

If you go the debt consolidation route, make sure to avoid running up more credit after you transfer the balances.

If you receive a debt consolidation loan and have bad credit, make the payments on time. This will go a long way to improving your overall credit score.