Debt Relief Grants From the Government

Government Debt Relief Grants

No matter what advertisers imply in their ads, there are no grants offered by the U.S. government for individuals to pay off their debts. There are, however, numerous grants available funding for research on a myriad of subjects.

Many of the advertisements offering to sell you information on how to relieve yourself of all your financial obligations, most of them are advocating bankruptcy, which comes under the scrutiny of federal and state laws, but are not in any sense a grant. The government can also forgive all or part of a federally backed loan, such as a student loan, but this in not a grant.

Bankruptcy

The government does not advocate bankruptcy proceedings and has strict regulations in place for an individual or company contemplating bankruptcy as a means of getting out from under a crippling debt load and starting over. When you see an advertisement about debt relief grants from the government to eliminate all debt, in all probability they are talking about a Chapter Seven bankruptcy.

New Stringent Criteria For Bankruptcy

In order to reduce the number of people using the bankruptcy court as a means of getting out of their financial obligations, the government enacted new laws to stop the abuse. The new laws require an individual to pursue budgeting guidance before they can seek bankruptcy relief.

There are two different bankruptcy avenues to be considered. Chapter 7 will allow total debt discharge while Chapter 13 will allow individuals a longer time to pay off their debts without incurring more interest or finance charges, following a schedule approved by the courts and overseen by a court trustee. Chapter 13 is only allowed if the individual can show that they have the resources to meet the payments stipulated by the court.

While bankruptcy may appear to some people as a debt relief grant, it is not. In a Chapter 7 filing, the individual may be required to sell certain assets to help satisfy some of their financial obligations. Chapter 13 allows someone to keep their assets as long as they prove they can meet the monthly payment required by the court.