Government Money for Help Paying Your Bills & Debts

Fake government grants are a big scam, but the government helps thousands of people each year pay their bills. Unpaid debt is unlikely to win you any government money, but you can legally escape debt with the government's assistance. To qualify for government assistance you usually need to meet low-income guidelines.

Bankruptcy

The government does not offer grants to pay off old debt. Governments are accountable to their citizens for every dollar spent, and paying personal expenses would not be prudent in most situations. However, the government provides bankruptcy as a way to eliminate debt you cannot handle. Bankruptcy is meant as a last resort and you must make less than the median income for your state. Also, filing for bankruptcy costs hundreds of dollars and most debtors need the help of a lawyer to handle their case.

Housing

The U.S. Department of Housing and Urban Development helps low- to moderate-income families find affordable housing. HUD does not pay funds directly to citizens, but makes money available to state governments and charities. The main form of housing assistance occurs through local public housing authorities that issue vouchers which you can use on any dwelling that meets the public housing agency's requirements. You cannot make more than 50 percent of the median income for the area in which you live and most vouchers go to families who make 30 percent or less of the median income.

Utilities

HUD may fund energy-efficient appliances and home improvements as well as help with other utility bills, such as gas and water. Another source of help for utility bills is the Low Income Home Energy Assistance Program. Again, the government funds this program but lets the state administer resources as it sees fit. Your income may not exceed 150 percent of the federal poverty level or 60 percent of the state's median income.

Tip

Ask your creditors and service providers about government help. If you are behind on your mortgage, for instance, you might qualify for a Making Home Affordable program, which gives an incentive to your bank to restructure your home loan. Also, contact state agencies related to your bills. They might offer locally funded help or inform you about other help for paying bills. Utility companies, for example, usually help low-income families with bills.