Are Government Debt Relief Programs Legitimate?

You’ve finally faced that you need help handling your debt. Congrats, that’s an important first step.

14:53 06 July 2021

Now, where should you turn? What are your options? You’re thinking of seeing what the government has to offer, but are government debt relief programs legitimate? Let’s take a look.

 

The Issue

 

Somehow you lost the handle on your debt, and now you have a problem. In that, you’re far from alone. But depending on the type of debt, you may be able to include the government as a possible source of relief.

 

You should note, however, that the government has no magic wand it can wave that will make all your debts disappear. There is bankruptcy, but the idea is to avoid that route, if possible. And if you have a spending problem, then that must be addressed.

 

Finally, you are wise to inquire whether government debt relief programs legitimate since there are a few fraudulent companies in the debt relief industry. You may even have gotten an automated call from someone excitedly claiming that “a new government program” can eliminate all your debt. These firms hope to make their scams more credible by using the word “government.” If your debt relief is in the form of debt settlement, a successful strategy that has a few bad apples, make sure you enlist the help of an established, credible company. Freedom Debt Relief comes to mind.

 

Government Debt Relief

 

The federal government has some specific programs to help with debt – mortgages and student loans, mainly. It’s no coincidence that such debt issues are constantly in the news. Let’s see what’s in the offing in terms of relief.

 

Government Debt Relief, Mortgages

 

Not too long ago, the Making Home Affordable program was oft used by homeowners seeking assistance. The program featured a host of foreclosure alternatives including the renegotiation of government-backed loans into manageable payments. Ever since those programs’ expiration, banks have been stepping up and offering their own modification programs. If debt this applies to you, call your lender.

 

Government Debt Relief, Student Loans

 

There’s seemingly no end to this situation. Late last year, student loan debt grew beyond $1.55 billion. In fact, such debt makes up more than 37% of non-housing debt. But the government is interested in helping because student loan debt is bad for the economy. For one thing, consumers who are having trouble repaying their loans are less likely to buy homes or make other major purchases that help stimulate commerce.

 

Most student loans nowadays are federal loans, which may qualify for one or more government debt relief programs. You should discuss your situation with your loan servicer and check out the federal government’s student aid website.

 

If your troubles are more short-term, you may want to consider forbearance or deferment. If you’re having problems making payments, you may want to go with loan consolidation or extension, or government assistance that’s based on your income. In some cases, your loan can be forgiven.

 

Government Debt Relief, Medical and Other

 

An illness or extended hospital stay can wipe you out financially. And while there’s no umbrella government program that assists with personal debt, you can likely get some help from local programs and state governments with medical and other obligations, including utilities, prescription costs and even food.

 

So, are government relief programs legit? You bet they are. But you will likely have to do some digging to find a program that suits you. And while you’re at it, rein in your spendingn, if that’s still a problem. Once you do get relief, you don’t want to find yourself back in the same situation – or worse.

 

Get going on your quest to return to solid financial ground.