Sunday, March 31, 2024

Government Programs To Help With Debt

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Financial Help For Women And Families

Energy Secretary Announces Program To Lower Utility Bills For Hill District Residents
  • Child Tax Credit A direct benefit of the U.S. governments stimulus program for COVID-19 debt relief. The American Rescue Plan signed into law in March 2021 increased this tax credit from $2,000 to $3,600 for children under six and to $3,000 for children up to 18 years old for families making less than $150,000 per year.
  • Single Mother Guide Lists many resources for single mothers and widows as well as statistics on single parenting.
  • NWLC The National Womens Law Center monitors laws and policies favoring women and families, and has a Poverty and Income Support section that contains articles and reports about available family support programs, family tax credits and more.

Information To Help You Manage Debt

ASIC’s MoneySmart website provides information managing debt, including details about how to:

Make Sure Your Familys Basic Needs Are Met

Assess your financial needs over the coming several months and prioritize necessary expenses. If possible, use your tax refund and Economic Impact Payments for food, medicines, and other items for your familys well-being, such as:

  • Medical care
  • Caregiving for children or other family members.
  • Telephone and internet to help you stay in contact
  • Transportation

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Close Accounts On Debts You Have Paid Off

Once a debt is paid, consider closing that account. Only keep what you need and can manage responsibly. However, you should keep an older account open as your credit score is based partially on how long you have had credit, also known as your credit history. Closing all of your older credit accounts can make your credit history seem shorter than it actually is and can hurt your credit score.

You may also want to consider using a secured credit card instead of a regular credit card. A secured credit card requires you to leave a deposit with the credit card issuer as a guarantee and you can only spend to that limit.

Hospital Financial Forgiveness Programs

What Government Debt Relief Programs Are Out There?

Depending on where you live, there may be laws in your state requiring hospitals to offer some form of need-based assistance. Here are a few key things to know:

  • Options vary by state. Individual states have their own laws about assistance that may be availableand they vary greatly. This could include free or discounted care, or in some cases, state-funded financial assistance. Some states may also provide need-based access to community health centers and other free or discounted health care for low-income individuals.
  • States make their own rules. While some states have mandates and some may offer financial incentives to hospitals, the majority of states only have optional policies.
  • You’ll need to financially qualify. Generally these programs are income-restricted, so you may not qualify for help if your income is above a certain level.
  • Ask about resources. Because the rules vary so much from state to state, to find out what’s available where you live, it’s a good idea to check in with your local hospital to see what resources may be available. The National Consumer Law Center also has a full listing of hospital policies by state.

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Coronavirus Crisis Is Squeezing Consumers

As the United States heads into the third month of the coronavirus crisis, consumers are being squeezed by compounding forces. Thirty percent have reported that their income has declined since the start of the pandemic.

Household debt has reached $14.3 trillion the first quarter of 2020

Federal Reserve Bank of New York

This decline in income coincides with a peak in overall household debt, which rose by 1.1 percent to $14.3 trillion during the first quarter of 2020, according to the latest Household Debt and Credit Report by the Federal Reserve Bank of New York. This is $1.6 trillion higher than the previous peak in 2008, but doesnt fully account for coronvirus effects given that the data only goes through March 31. It is critical to note that the latest report reflects a time when many of the economic effects of the Covid-19 pandemic were only starting to be felt,said Andrew Haughwout, a senior vice president at the New York Fed.

Simultaneously, overall consumer spending has declined precipitously as Americans increase their savings rate given uncertainty and as shelter-in-place restrictions have led to the cancellation of both one-off events and routine activities. This is a harbinger for the economy given that consumer spending drives growth and is to key not only to recovery in the short term, but also to balanced longer term growth.

How Else Can I Get A Reduction In Debt

While it may not be possible to get free Canadian government grants to pay off debt, there are other forms of debt reduction out there. In fact, there is a form of debt relief for everyone, no matter what your financial situation. A reputable Licensed Insolvency Trustee can help you to figure out the best form of debt relief for you. Below is a summary of the primary ways of gaining debt relief in Canada.

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Bad Ideas For Debt Relief

You might think things like settlement and bankruptcy would be bad ideas for debt relief. But even though these solutions may damage your credit, they are still viable strategies for finding relief. When you declare bankruptcy, you make a clean break from debt, so you can move forward in a positive way.

On the other hand, there are several options that put people in a weaker financial position than when they started. These solutions increase your financial risk or hurt your assets. Even though they wipe out your debt, they put you behind. If possible, you want to avoid these solutions.

Financial Aid For Education

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Programs that can help include:

  • Federal Student Aid Details the types of grants and scholarships available.
  • QuestBridge Provides information on resources for high-achieving, low-income students, plus resources for educators.
  • The Education Trust Advocates for students with high academic achievement, especially those in low-income situations, and offers a number of tools. Those include help in choosing a college based on performance.
  • Bloomberg Philanthropies Helps high-achieving students who are low- and moderate-income.
  • FinAid Provides information on educational loans, scholarships and military aid, as well as several dozen financial calculators. Gives tips on choosing a college, options for online degrees, jobs and internships and more.
  • JKCF The Jack Kent Cooke Foundation site has scholarship, grant and other info intended for exceptionally promising students from low-income families.

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Best For Customer Satisfaction: New Era Debt Solutions

New Era Debt Solutions maintains a staff of attorneys ensuring that everything is done according to state and federal law giving consumers confidence in the job done.

  • No upfront fees or monthly administration charges

  • Attorneys on staff

  • Free consultation with a debt specialist

  • Not available in certain states and cities

New Era Debt Solutions has been in business since 1999 and has helped clients settle over $250 million in debt. Clients will not pay any upfront charges for its services. Its plans also come without any monthly administration fees, and performance-based fees are only charged when you see results.

Like other debt settlement companies, New Era Debt Solutions has its clients save money for debt settlement in a separate account. In the meantime, they negotiate with your creditors to help you pay less than what you owe.

According to the company, its clients settle their debts and become debt-free after an average of fewer than 2-3 years. They claim to be able to expunge over 50% of debt owed. The company claims to lower both the balance and interest rates of debts.

Other benefits of New Era Debt Solutions include the fact it has attorneys on staff and an account management team is also assigned to each client from the start. The company also handles all of its work in-house and never outsources tasks to other unproven firms or contractors.

Federal Government Relief For Covid

Congress passed the $1.9 trillion American Rescue Plan Act in March 2021, following up on COVID-19 relief actions taken in late December 2020 and March 2020 . By 2022, most of the focus of federal COVID-19 help had shifted to vaccinations, testing and getting schools and businesses back open.

Some of the highlights of the American Rescue Plan, and their status, are:

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Is There A Government Program For Credit Card Debt Relief

No. The government does not have any relief programs that forgive or repay consumer credit card debt. There are, however, several ways that the government regulates credit card relief programs:

  • The FTC regulates debt relief companies to make sure they provide services as advertised.
  • The government created the Advance Fee Ban to ensure consumers receive help before they pay fees.
  • The FTC also oversees nonprofit consumer credit counseling agencies that provide debt management programs.
  • Nonprofit credit counseling agencies are granted 501c status. But in order to qualify, they must provide impartial help. In other words, a consumer credit counselor must review all possible paths toward debt relief during a consultation. They can only recommend a solution if its the best choice to use in your unique financial situation. This allows you to get expert advice without being driven to a debt management program.

    These agencies are funded by grant money to provide low-cost relief to consumers. Thats how credit counseling agencies keep debt management program fees low. However, the grants these agencies receive are not federal grants. They are private grants from credit card issuers. Back to top

    Search For Financial Assistance From The Government

    [Updated 2021] Government is a free website that can help you determine which types of government assistance you might qualify for. You can also find out how and where to apply.

    • Using the Benefit Finder, answer questions about yourself and your needs. Afterwards, you can find out if youre eligible for programs to help you pay for:

    • Food

    • Housing

    • Utilities, and other necessities

    Check back with in the future to see if youre eligible for additional benefits. You can report major life events or see if new benefit programs have become available.

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    Avoid Making Poor Borrowing Choices

    Seniors carry the highest credit card balances of any age group we help, many with balances of $10,000 or more. More than half carry balances over $30,000. This is credit card debt build up over a lifetime. If you have balances on more than one credit card, are using one credit card to live while making minimum payments on the other, it is time to consider the options at the bottom of the article for debt relief.

    Seniors are also increasingly turning to payday loans. The problem is if this months retirement income isnt enough to pay the bills, taking out a payday loan isnt the solution. Having to pay back that loan out of your next pension cheque puts you at a loss the following month.

    Pre-retirement debtors should think carefully before taking out a debt consolidation loan to consolidate credit card and other debts. A Home Equity Line of Credit may be attractive as payments are interest-only and as a result are quite low. Beware, however, that if you fail to make any refinanced mortgage payment, you are putting your home at risk. Make sure such a solution deals with all your consumer debt and that you can afford the monthly payments. In any debt consolidation scenario, dont let your credit card balances grow again.

    Similarly, there has been a rise in reverse mortgages which raises concerns about the number of seniors tapping into their home equity to pay for living costs.

    How To Get Out Of Credit Card Debt Without Paying

    If you have more credit card debt than you can handle, there are a few steps you can take however, you may want to consider the repercussions first. Here are some options:

    • Stop paying your credit card bill: If you opt for this approach, the debt is turned over to a collection agency and your credit score will decline dramatically. But theres a statute of limitations for how long creditors can sue you for outstanding credit card debt, which varies from three to 10 years in most states. You could skip payments, but you might be liable for them later. Technically, you can stop paying your credit card bills, but it isnt advisable, says Tayne. It will make it difficult for you to borrow money for years to come. Plus, youll get hounded by your creditors and collection agencies and could even get sued.
    • Debt settlement: Another route is debt settlement, which involves settling your debt with the current lender for less than what you owe. Debt settlement is an agreement that you would make with your creditor where the creditor agrees to accept less than the amount owed to satisfy the debt. Amounts generally fall in the range of 50 to 80 percent of the balance, says Katie Bossler, of GreenPath Financial Wellness. You can negotiate your own settlement or hire a lawyer to negotiate on your behalf.

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    What Are Government Grants

    Government Grants are a kind of help to low income and needy people to live a equal and healthy life, like others living in this society. Government grants can be considered as a gift that never pay back. These can grants can be Helpful to money help or to pay medical bills or to pay daily expenses. There are various grants and programs available in locality those who feel need of them are eligible can apply for these government grants.

    Are There Government Credit Card Debt Relief Programs

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    Currently, there are no government-sponsored or government-backed programs that provide credit card debt relief to consumers. For example, unlike what you see with federal student loans, you cannot apply to have credit card debt forgiven without penalties. No program allows you to refinance or modify the terms of your credit card agreement like there were with mortgages during the Great Recession.

    What the government does provide is oversight and regulation of debt relief services:

    • The passed during President Obamas administration prevents debt settlement companies from charging upfront fees. These companies may not charge fees until a debt is successfully settled on the consumers behalf.
    • The Uniform Debt Management Services Act offers guidance to state governments on how to regulate credit counseling and debt settlement services. Under this agreement, many states:
    • Only allow registered nonprofit credit counseling organizations to provide debt management services
    • Cap fees for debt management services
    • Require both credit counseling and debt settlement companies to be accredited by a nationally-recognized association, which maintains strict ethical standards.
    • Require credit counseling agencies and debt settlement companies to provide financial education as well as debt relief services.
  • The Department of Justice also authorizes certain nonprofit credit counseling organizations to provide pre-bankruptcy counseling and debtor education.
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    Minority Business Enterprise Center Grantsfor Non

    This is an example of the types of grants non-profits can apply for. It is given to non-profit organizations with minority leaders or owners. If a business, even if it is a sole proprietorship, is able to gain non-profit status, it can apply for such a grant. It can help them with debt. But again, it is not a sure thing, and if you arent a minority non-profit or business owner, youre out of luck.

    Government Debt And Financial Assistance

    • The U.S. Treasury Department joined other federal agencies to establish the Financial Literacy and Education Commission with a purpose of improving the financial literacy and education of persons in the United States.
    • 1-888-MY-MONEY
    • The FDIC offers a link on its website to help individuals become better informed consumers and to help them submit comments on bank complaints.
    • 1-877-ASK-FDIC
    • The Federal Reserve has a dedicated website that consumers can access if they have a problem with a bank or other financial institution.
    • 1-888-851-1920
    • The FTC has a link on its website to a section with helpful information on credit cards, consumer loans, and credit counseling agencies.
    • 1-877-382-4357
    • Headquartered in Washington, D.C., the Office of the Comptroller of the Currency has four district offices plus an office in London to supervise the international activities of national banks.
    • 1-800-613-6743

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    Federal Student Loan Repayment Plans

    The government offers eight different plans that make it easier or more efficient to repay federal student loan debt.

    There are two plans for borrowers that want to get out of debt as quickly as possible:

  • Revised pay as you earn
  • These programs consolidate eligible federal student loans into a single monthly payment. If you have federal loans that dont qualify for these programs, use a Federal Direct Consolidation loan. This helps ensure all your federal loans are eligible for relief.

    And if that seems like an overwhelming number of choices, then be patient. President Trump proposed that Congress should reduce the number of plans from eight to three, to make things easier. But for now, ask your federal student loan servicer for more information about which plans are right for you.

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