Government Debt Relief Programs for Consumers

There are a number of advertisements for companies that will assist you in locating government debt relief programs. You should be wary of these offers; there are not actually government loans or grants that will help you pay off your debt. What the government does offer is some degree of assistance to those people who have an emergency financial situation, are in debt to the government or are victim to predatory lending.

Emergency Financial Assistance

If you are a low income or economically-disadvantaged person, you may be able to locate some relief to assist you in meeting necessity payments. This does not mean paying off credit card bills. Rather, the government will assist you in paying utilities, buying food and paying rent. You will have to apply with a social services office to see what assistance is available in your situation.

If you have lost your job, you should know you are eligible for unemployment. This does not apply if you were fired. Unemployment only helps those persons who were laid off for a reason other than performance. Unemployment does not replace your salary entirely. Instead, unemployment payments factor in the cost of living in your area and your fixed costs in order to determine an appropriate living wage.

Federal Debt Relief

If you are in debt to the government itself, you will have more options for negotiation and assistance. Families who have student loan debt are eligible for student debt consolidation. Consolidation will only help if you have more than one loan with the government and only if the loan is not yet in default. If these conditions apply, you will be able to combine the debts, and your monthly payment may go down.

You may also be eligible for student loan forgiveness if you are performing a public service activity. This may include working for a nonprofit organization or serving in the military. People owing taxes to the Internal Revenue Service or their state's department of revenue may be eligible for a certain degree of tax debt forgiveness. You will have to contact the party you are in debt to and prove that you cannot financially meet the payments you owe. If you would simply rather not pay them, you will not qualify.

Predatory Lending Assistance

After the mortgage meltdown in 2007, the government realized many people would be defaulting on their mortgages. In order to prevent too many foreclosures, the government does offer some assistance to get out of bad loans and stay in your home. The FHASecure program was introduced to allow people to refinance subprime mortgages and get better mortgage terms.

Those people applying for this program must be able to show they will be able to afford the new loan. You must have been making payments on your mortgage before the rate adjusted. Basically, the loan program is only for those borrowers who were lead into mortgages that would adjust to rates they could not afford in the future; if you were not a victim of this predatory lending practice, then you will not qualify.


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