Economic difficulties, including injury and illness, could force you into debt that becomes a crushing burden. Most people try to pay off the debt as best as they can, sometimes seeking assistance from family and friends; others decide to file for bankruptcy. However, under certain circumstances the federal government can provide assistance through a grant, low interest loan or other programs that can reduce or eliminate your debt load.
Finding a Source of Assistance
Identify the government department that might have a grant or assistance program that fits your situation. For example, if you own a business and you have credit card debt that you can identify as costs related to your business, you might get assistance from the federal Small Business Administration. The SBA has programs that can provide funds to assist in the refinancing of your credit card debt as long as you can show that the debt is related to your business (see Reference 1).
One such program is the ARC, or America's Recovery Capital, loan, part of the American Recovery and Reinvestment Act passed by Congress early in 2009. To qualify for this loan you need to show that your business is suffering hardship, that you have an established relationship with a bank and that your small business has been in operation for a minimum of two years. Moreover, you must produce financial statements to show that your cash flow projections for the next two years are sufficient to pay your loans.
If your business has accepted a Small Business Administration direct or guaranteed loan, you may be able to defer loan payments, reduce the interest rate or receive other credit or financial assistance if you are a member of the National Guard or the armed forces Reserves (see Reference 2). You can also receive relief if you are saddled with a student loan or you owe as a result of medical costs.
Determine the reason for your debt--student loan, business, health costs, tuition fees, car loan, home improvement, etc. and then visit the website of the federal government (see Reference 3) or the federal government's grants website (see Reference 4). These sites include a search engine that allows you to search for grants or other assistance programs related to your situation. It is imperative for you to identify a specific program or programs so that you can ascertain the requirements and whether your situation meets them.
Prepare to Apply
The federal government agency to which you apply will review and approve or not approve your application for assistance. If you apply for a state grant, the state's Office of Social Service oversees the review and approval process. They base their decision on the financial need of the applicant, so you will need to prepare for applying by gathering records and documents concerning your current income, outstanding debt, monthly debt payments, sources of the debt, etc. The program you find that fits your situation will also provide information on documentation and other information it will require to review your request.
Apply for Assistance
Contact the agency or department that offers the grant or assistance you have targeted and ask it how to apply. There are also organizations that can be found with an Internet search that will help you identify a grant program that fits your condition and will assist you, for a fee, in actually applying for the assistance.
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