It's unlikely you will find a grant to pay off your credit card debt. As of 2011 there are no taxpayer-funded grants for paying off credit card debt, and no major foundations or nonprofit groups offering grants. The government can help indirectly by allowing you to eliminate credit card debt through bankruptcy, while nonprofit groups such as the Urban League and Salvation Army may offer workshops and classes on managing credit card debt.
Alternatives
Public and private money grants to pay off personal credit card debt are considered personal bailouts and viewed as an improper use of funds. People who are burdened by credit card debt can seek other grants that indirectly help credit card problems. Grants for housing, child care and employment are available from various organizations and can help your overall financial stability. By obtaining legitimate grants for other purposes you can free up more discretionary income to pay off credit card debt.
Settlement
Some credit card companies issue what amount to grants by accepting less than the full amount owed on delinquent accounts. The SmartMoney website reports that banks will accept as little as 20 percent of the balance on a delinquent account, although the range is 20 to 70 percent. Even settling for half the amount owed offers a huge savings and may as effective as a grant.
Bankruptcy
Bankruptcy is a very effective bailout for credit card debt. Chapter 7, the simplest form of bankruptcy, can be completed in just a few months and completely eliminates credit card debt. The drawback is that it also ruins your credit, with the bankruptcy remaining on your credit report for 10 years. The Federal Trade Commission lists bankruptcy as the most extreme form of debt management and recommends that you avoid it if at all possible. However, some people see it as their only option after their credit card debt spirals out of control.
Debt Management Plans
Debt management plans directed by nonprofit credit counselors are another option. The plans allow government-certified counselors to contact your credit card companies to discuss payment plans, including the waiving of some fees and finance charges. Enrollment in a debt management plan requires you to allow the counseling agency to take control of your monthly budget and make payments directly to credit card companies on your behalf. You will be charged a monthly management fee and must send the counseling agency a lump sum payment each month covering your minimum monthly payments. Local charitable organizations such as the United Way can direct you to nonprofit credit counseling in your area.
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