What Is a Government Debt Relief Program?
Government Debt Relief Program
If you’re someone who’s dealing with the burden of debt, you may be wondering if there are relief options available. Whether you’re faced with medical debt, student loan debt, or credit card debt, owing money isn’t fun for anyone. The good news is that there are various programs out there designed to manage your debt – including ones from the government.
What Is a Government Debt Relief Program?
A government debt relief program offers financial assistance and advice to those struggling with debt. But while there are various strategies and programs out there to manage your debt, there, unfortunately, aren’t any programs available where the U.S. federal government directly forgives your debt.
Here’s what exists instead:
Federal Student Loan Forgiveness
Student loan debt can be overwhelming and a source of anxiety. The good news is that there are relief options available if you took out government student loans when you went to college.
Public Service Loan Forgiveness (PSLF) is a program created specifically for people working for a government or non-profit organization. If you have worked at the said organization for 10 years while maintaining monthly payments, you may have your remaining student loan balance forgiven.
The best news of all? The forgiven balance isn’t considered taxable income.
Veterans’ Debt Relief
The last thing veterans and active military members should worry about is debt – but the reality is many service members face crippling financial worries that can be incredibly stressful and scary. Fortunately, veterans’ debt relief is available.
The Servicemembers Civil Relief Act is a law that was passed in the 1940s that regulates interest rates for car loans, credit cards, and more for active military members. If a service member is deployed, it also lets them out of their lease without penalties. The SRCA offers active military members protection and reduces the interest rate on any previous loans to 6%. This can be incredibly helpful for active military looking to control their debt while deployed instead of letting it balloon over time.
If you’re a veteran dealing with debt, there are some options available to help ease the burden. If you have a VA home loan, you may qualify for a Military Debt Consolidation Loan. This is a helpful way to pay off other debts by borrowing against the equity in your home. These loans usually have better interest rates and terms than the standard loans available to everyone else. You may also qualify for veteran debt relief grants depending on your situation.
State Programs
Depending on your situation and the nature of your debt, you may be able to qualify for assistance from organizations local to you. Various agencies and services can help connect you with grants or personal loans to help you better manage your debt. This can be helpful if you’re falling behind on payments and looking for a solution.
Certain nonprofit organizations may also provide free budget counseling services to help you take control of your financial situation and find a light at the end of the tunnel.
What About Credit Card Debt?
While there are relief programs out there designed to help active military, veterans, and people struggling with student loan debt, the unfortunate reality is that these programs don’t apply to credit card debt. There are no government debt relief programs for credit card balances.
If you’re struggling with credit card debt, there are still various options out there that can help get you back on your feet. These include consolidating your overall credit card debt, practicing responsible spending, and striving to pay more than your minimum payment.
Government Debt Relief Programs
If you were trying to find out more information to the common question “What is a government debt relief program?” we hope the above information answers some of your questions.
While it can be tempting to bury your head in the sand when it comes to dealing with your debt, remember there are always options available to improve your financial situation. You just need to know where to start!