Though many websites advertise that consumers can apply for governmental grants specifically for "debt relief," the claim is not true. There is no specific federal program which provides a lump sum payment to a consumer to rid herself of debt. Notwithstanding, there are numerous, government-funded programs that can help a debt-burdened consumer.
Credit Counseling Agencies and Debt Reduction Firms
There are government-subsidized, non-profit counseling services, both state and private, which provide assistance to debtors for free. Such counseling enables consumers to negotiate less burdensome repayment schedules with their creditors.
A debt reduction company, however, will charge a fee for services rendered. Primarily, debt relief is accomplished through renegotiation of interest rates directly with a client's creditors, often reducing both his monthly payments as well as his long-term costs.
Government Grants
The U.S. Government features a web site featuring grants in three categories: government benefits, student loans and small business start-up loans.
Clicking "Benefits" brings up more than 20 targets, though none are titled, "Debt Relief." However, choosing Loan/Loan Repayment will link you to numerous programs, which are categorized as follows:
Mortgage insurance and loan guarantees: 6
Small business loans: 7
Repaying research loans: 8
Disaster loans: 4
Education loan consolidation: 1
Farm loans: 3
Grants to needy students: 1
Grants to fisheries:1
Hope for Homeowners (refinancing in lieu of foreclosure): 1
Health service loan repayments: 4
Home loans to Native Americans: 1
Student loans for parents: 1
VA loans:5
Maybe not cash in your pocket, but all are designed to reduce your cost of living.
Searching for Benefits
Another federal website featuring government benefits prompts visitors to complete a questionnaire, formulated to determine potential eligibility. For instance, entering the profile of a single, middle-aged male without minor dependents with a household income below the poverty level yields about 50 assistance programs, including grants, loan guarantees and fellowships.
Low-income parents with small children can anticipate over a hundred options from which to seek assistance.
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