You’re in over your head in debt and you’re considering any and all solutions. But do you know how U.S. government debt relief programs work? If you don’t, you may be surprised to learn that you may find resolution. It all depends on your loan type, though. Let’s see what’s in the offing.
Overall, nearly every federal program will assist those who have fallen on tough times, although there’s no guarantee you’ll be eligible for a debt relief program. Note, too, that that if you have credit card or other unsecured debt, the government can’t help unless you’re at the point where you’re in need of assistance with essentials such as utility payments. In those cases, state and local programs can likely help.
Before pursuing any debt relief program, make sure your spending is in check. Otherwise, you’ll likely wind up in the same situation – or worse. Make a budget so that you can see where your cash is going and to ensure you have enough funds to cover your bills. If your income is lacking, you may need to ask for more work hours, get a part-time job or come up a home-based “gig” that you’ll enjoy.
It’s also important to create an emergency fund – six months to a year is optimal, although whatever you can set aside is better than nothing. Otherwise, it’s too easy to whip out the plastic when something unexpected arises, such as broken-down car.
Mortgage Debt Relief
As far as US government debt relief programs go, there were few more popular than the Making Home Affordable program, which provided a host of ways to avoid foreclosure. Alas, that program ended. The bright side is that lenders realize they’re expected to fill in the gap by, when necessary, renegotiating loans into more manageable payments. If you’re having trouble making payments, talk to your lender.
Student Loan Debt Relief
In the United States, student loans comprise the largest consumer non-housing debt. Last we checked, the total student loan debt load came to a whopping $1.55 billion – and growing.
Why would the government help with student loans, you ask? Well, it’s because the government has a vested interest, and it’s called the economy. If you’re wrangling with student loan debt, you pay put off buying a house, say, if you buy one at all.
Talk to your loan servicer if you’re have difficulties repaying your federal student loan. The government also has a website dedicated to helping you manage your loans.
Medical and Hardship Debt Relief
If you rack up potentially ruinous medical debt, you may turn to your savings or a credit card to see yourself through. As you can imagine, this can quickly turn into a financial quagmire. If you go to USA.gov you can find help with medical and other bills.
Government Protection Against Collectors
Although this won’t net you any cash relief, it’s good to know that if your debts become delinquent, particularly credit card debt, you have rights in terms of when and how debt collectors communicate with you. The federal Fair Debt Collection Practices Act also bars debt collectors from using abusive or threatening language.
Now you know a bit about how U.S. debt relief programs work. If you’ve found one that may help your situation, terrific. Get moving on it. If you haven’t, perhaps a solution such as debt settlement or debt consolidation can help.
If you do your homework, chances are you can find an option that works for you.