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Does Government Debt Relief Exist?

by Louise W. Rice
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At long last, you’ve concluded that you can’t handle your debt alone. You realize you need help. Well, kudos; such a realization is an important first step. But now what? What exactly are your options? You’re mulling to see whether the government can assist you, but you don’t know what kind of help is available. In fact, you aren’t even sure whether government debt relief exists. Here’s what you should know about that – and more.

The Issue

Somewhere along the line, your debt got out of control — and now there’s a problem. Of course, you aren’t by yourself. U.S. consumers are increasingly grappling with debt, particularly during this inflationary period, when prices are high across the board, and people are whipping out the plastic to pay bills and get the things they need. But depending on the type(s) of debt you have the government just may be a possible source of relief.

Let’s note off the bat, though, that Uncle Sam lacks a magic wand it can wield that will make your debts go poof! Would that be true? You could file bankruptcy, which is overseen by the court system. But that’s the solution of last resort, so you should avoid it, if possible. And if excessive spending has contributed to your problem, then you must address that first. Otherwise, any financial strategy will be rendered ineffective.

Another proviso is that, because of the cache the phrase “the government” carries, you must be wary of scammers in the debt relief space who purport to tout “a new government program” or some such that can eliminate all your debt. These criminals know that mention of the government tends to get one’s attention. If you choose as your form of debt relief, debt settlement, be sure you choose an established, reputable company such as Freedom Debt Relief. Debt settlement has certainly helped scores of consumers, but there are bad actors out there.

Government Debt Relief

The federal government does offer specific programs to assist with debt, mostly mortgages and student loans. Let’s look at what’s in the offing, including government debt forgiveness.

Mortgages

It wasn’t too long ago that the federal Making Home Affordable program was frequently used by homeowners needing help. After all, the program offered a range of foreclosure alternatives, including the reworking of government-back loans into payments that were more manageable. The good news is that ever since that program expired, lenders have been stepping up and presenting their own modification programs. So, check with your lender.

Student Loans

Student loan debt last year ballooned to more than $1.55 billion, comprising more than 37 percent of non-housing debt. The government has a vested interest in helping, though, since such debt is not good for the nation’s economy. For example, people who are struggling to repay their loans will be hard-pressed to buy a home or make other big purchases that help stimulate the economy.

Because most student loans currently are federally backed, you may qualify for at least one government debt relief program. Contact your loan servicer and peruse the student aid website.

If your woes are more short-term, you may want to think about deferment or forbearance. If making payments is an issue, you may want to pursue loan consolidation or extension, or income-based government assistance. Depending on your circumstances, it’s possible that your loan can be forgiven.

Debt Relief, Medical and Other

An illness or protracted hospital stay can be financially ruinous. And while there’s no catch-all government program that helps with personal debt, you can likely get some assistance from local programs and state governments for medical and other obligations, including food, utilities, and prescription costs.

So, does government debt relief exist? Clearly, the answer is yes. But such assistance is limited, and you’ll have to do some work to find a program that’s suitable and for which you qualify. In the meantime, if you’re overwhelmed with unsecured debt, consider debt settlement with Freedom Debt Relief.

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