How Government Debt Relief Grants Work

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. Unfortunately, what a lot of these ads are selling are bankruptcy services. Bankruptcy is under the purview of the government, but it a federal debt relief grants it is not. The government may not offer grants to pay off debts, but they do handle bankruptcy matters.

While not technically debt relief grants from the government, there are programs for people who need help with student loans or are facing foreclosure. These programs usually have very strict guidelines. The government can also forgive federal loans, but again, these are not government grants for debt relief .

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 government grants for debt relief are the solution, but the reality is that only bankruptcy allows them to start over.

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. For example, anyone being considered for bankruptcy must go through credit counseling first. Again, because there really are no federal debt relief grants, the companies youve seen are likely offering bankruptcy services.

You can get government grants for debt relief in other ways than just filing Chapter 7 bankruptcy. 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 happens only if you are able to meet the payment amounts set by a court trustee.

Although both Chapter 7 and Chapter 13 bankruptcy might be misconstrued as government debt relief grants, in actuality, individuals who file for Chapter 7 may have to surrender any property they own, to be liquidated for debt repayment. As long as you continue to make regular payments (as appointed by the court), you get to keep your property when you file for Chapter 13 bankruptcy.