With consumer debt increasing every day all over the United States, many are in the middle of credit card bills, medical bills, payday loans, and other bills that they cannot pay. This gives many a cause to ask – is there a debt relief program that may solve this problem?
To answer this question in the shortest possible way, I will only say that there are several, although limited, ways through which debt can be forgiven or reliefs can be gotten from the government or private organizations. However, qualification requirements usually are rigorous, and their assessment relies on such particular criteria as money owed.
Government Debt Relief Programs
Some of the main debt forgiveness and relief programs offered by the government include: Some of the main debt forgiveness and relief programs offered by the government include:
- Additional forms of debt forgiveness include those for public workers, including government, military, nonprofit, and employees, among others; after completing the appropriate monthly payments for ten years. There is also the option of debt forgiveness and income-based payback schedules.
- Homeowners still struggling to pay their mortgages should contact their lenders or the Making Home Affordable program for mortgage refinancing or modification programs. These may cut the loan's total amount as well as, in certain situations, the payments.
- Most of the time, declaring bankruptcy removes many types of unsecured debt, including credit cards, medical bills, and personal loans. Taxes and school debts are not canceled, however. Additionally with bankruptcy comes a relatively lengthy reporting period ranging from seven to ten years.
- While the IRS may collect payment in full for the tax bills owing, in certain hardship situations there is an Offer in Compromise that lets the debts be resolved for a smaller value. This is also true for state tax departments as they could have comparable debt settlement schemes.
The only drawback to these government programs is that to qualify for them people often have to meet a set of rather rigid financial need standards. There are conditions that include, income limits, debt-to-income ratio, credit report checking, and others. Employed individuals who are currently making debt payments will not meet the requirements.
The following are the private debt relief and forgiveness programs:
However, there is a way out in the form of help from the state, as well as private companies and non-profit organizations. Options include:
- Credit Counseling – Reliable firms of credit counseling liaise with creditors to have lower interest rates and/or forgone charges, plus consolidated monthly installments towards the debt. These programs entail payments to be made within the agreed time.
- Debt Settlement – Debt settlement is a process where a company or an individual gets involved in discussing the amount of money that needs to be paid to creditors and agrees to pay only a percentage of the outstanding amount. As for this, it does imply some fees and has the potential to affect credit scores for some time. It means that qualification depends on your existence of cash or sometimes lack of it.
- Medical Debt Assistance – It is a common practice for most hospitals and clinics to have a plan that gives certain levels of discount or waives off the bill depending on the patient’s economic status. Other charitable organizations which are formed independently also assist people facing difficulties with medical bills.
This is similar to being cautious when approaching any other debt relief program; one has to be very careful and selective when choosing an organization to enroll in. Do not invest in companies that make high-risk guarantees or demand that you pay them a lot of money upfront. As a rule, legitimate assistance programs claim low prices after the provision of services.
Even though government and private debt forgiveness programs are not all-inclusive, they have offered many households some form of salvation. Those consumers experiencing difficulties when it comes to meeting the minimum payments are advised to dedicate their time to studying these products. The little time needed to study the qualification criteria can be utilized to get a break from accumulating more debts.
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