Debt Relief Grants from the Government: Too Good to Be True?
Despite the fantastic claims you may have seen in certain ads, the government does not in fact offer grants to people to pay off their debts. Although varieties of grants for funding are available, debt relief grants from the government are not one of them. Many of these advertisements on how you can legally get out of debt are actually selling bankruptcy services. Bankruptcy is under the purview of the government, but it a grant program it is not.
There are programs designed to help individuals bogged down by huge student loans and threats of mortgage foreclosure, for example, but these have strict requirements and are not classified as debt relief grants from the government. Another thing often mistaken for debt relief grants from the government is when the government forgives all or part of a federally related loan.
Although the government does not advocate bankruptcy, it recognizes that the only option for some people is to declare bankruptcy and start all over again. Some advertisements claim that debt relief grants from the government are the solution, but the reality is that only bankruptcy allows them to start over.
Bankruptcy Rules Have Recently Been Tightened
Realizing that increasing numbers of individuals were abusing bankruptcy laws as an easy way to get out of their debts, the government has created new rules to ensure that creditors do not end up being forced to pay for the misdeeds of irresponsible spenders. Nowadays, individuals are required to receive budget counseling before they are considered for bankruptcy relief. Since there are no such things as debt relief grants from the government, entities advertising these are likely offering bankruptcy services.
Besides Chapter 7 bankruptcy, there is another option for people who are looking for debt relief from the government. According to Chapter 13 bankruptcy rules, the debtor is required to pay off his debts on a regular basis and within a stipulated time. This is provided that the debtor has sufficient income to meet the payment amounts required by a court trustee.
Although both Chapter 7 and Chapter 13 bankruptcy might be misconstrued as debt relief grants from the government, in actuality, individuals who file for Chapter 7 may have to surrender any property they own, to be liquidated for debt repayment. Individuals who file for Chapter 13, however, get to keep their encumbered properties so long as they meet their regular repayments.
~~~
To Your Financial Success
~Suze Fulton
11 Comments »
RSS feed for comments on this post. TrackBack URL
Leave a comment
We are running top commentator, keyword luv, comment love, and we are a do follow blog. If you leave a good and topic relevant comment it will be accepted. If you leave a low quality comment like "good post" it will be deleted. Please add to the conversation.
August 17th, 2009 at 2:47 am
There is so much mystery, misconception and inaccurate info about grants and accurate information is so hard to find.
I have read that a gigantic amount of the grants money provided goes unclaimed- innacurate? It is easy to imagine that it’s true given how difficult is to discover eligibility for grants, and writing claims that work.
This article is awesome because it dispels some of the myths.
Thank you. Now to read more of your articles!
September 29th, 2009 at 8:21 am
If people find themselves in a bad situation they should look at all of their options before trying to file for bankruptcy. There are many different options out there to offer debt relief to people that are hurting and often times it is as simple as changing some bad habits and coming up with a budget. Even if there was a debt relief grant out there it would probably take months just to qualify for it and people that are in a bad spot typically need help right away. Great article.
October 22nd, 2009 at 7:04 am
Hi there,
I looked over your blog and it looks really good. Do you ever do link exchanges on your blog roll? If you do, I’d like to exchange links with you.
Let me know if you’re interested.
Thanks..
November 8th, 2009 at 7:57 pm
I have been very surprised at the number of grants available that people do not even know about. And I had no idea that you could get a nursing degree for free just by agreeing to work at a local hospital for a couple of year. Too bad more people do not know about grant opportunities available to them.
Casey@Free Grant Money´s last blog ..Entrepreneurs Find Free Grant Money for New Businesses
November 20th, 2009 at 2:06 pm
I’m wondering if the government still offers grants for debt relief and the criteria for approval. If this program is still available, it could certainly help quite a few people.
November 23rd, 2009 at 2:03 pm
Not enough people know about federal grants. There is money out there if you look!
December 9th, 2009 at 2:54 am
Good article, before trying for bankruptcy it’s imperative you find out the true levels of your debt and also ask your creditors if they are willing to reduce your debt. many are more than happy to accept a smaller amount.
Mark@Credit Card Debt Forgiveness´s last blog ..Credit Card Debt Forgiveness
January 28th, 2010 at 9:24 am
Good post! Very helpful.Yes the government and lending private institutions are coming together and trying to sort out or provide a solution for anyone in debt.The government seems to be more interested in getting you out of debt.
February 23rd, 2010 at 6:30 am
I think that so many times people get overwhelmed by the amount of debt they have. What they forget is paying small amounts is better than nothing and will help reduce the overall amount
March 1st, 2010 at 5:32 am
If you have really bad debt then I think debt counselling is the best solution. Trained debt counsellors will consolidate all your debt into one easy payment.
June 21st, 2010 at 3:50 am
Great Article, Thanks for posting helpful information, The government still offers grants for debt relief and the criteria for approval, If this program is still obtainable, it could definitely help a few people.