Types Of Government Debt Assistance
While there is no government debt relief program, there are several government debt assistance programs and regulations that can help you cope with debt.
FTC regulations
While the FTC doesn’t offer debt relief, it regulates what these companies can and can’t do. Debt settlement companies aren’t allowed to charge fees before actually settling an account. And they must make the following disclosures to customers before they sign up:
- Cost. Debt relief companies must explain how much the service will cost you, when it will charge the fees and any additional terms.
- Length of program. The companies also must disclose how long it typically takes to complete a program and when you can expect to see results.
- When negotiations begin. The FTC requires companies to tell customers how much they must first save before the negotiation process begins.
- Risks. Companies are required to disclose the risks of stopping payment to your creditors. This includes damage to your credit score and potential lawsuits and a higher balance due to unpaid interest and late fees.
You can file a complaint with the FTC and CFPB if you come across a company that fails to do any of these things. And before you sign up for debt relief, you can make sure the company and its owners are legit by searching for it on the FTC’s list of banned debt relief companies and individuals.
Federal student loan forgiveness
Tax debt forgiveness
Tax deductions
Reductions for military service members
Governments Debt Relief Plan
Within the last month, the Department of Trade and Industry made recommendations for amendments to the. The suggested shift, if passed, will allow the minister to implement debt relief measures for certain qualifying creditors and further reducing the weight on over-indebted households over time. A set of changes that will include debt forgiveness to struggling consumers, this is seen as a step towards a consumer friendly credit market, by government. However, the plan is not without its shirt-sighted elements, with little thought seemingly put into the long term impact of the action.
The governments plan to apply this debt forgiveness change could pose a major threat not only to the financial sector, but also to the consumers themselves. The proposed fix would give the minister of trade and industry the authority to hand out and apply debt relief measures to specified classes of indebted consumers, for example those who find themselves retrenched or without work while trying to pay off excessive debt. The department recommended that certain criteria be set, under which a qualifying consumer may ask for debt relief from the government.
Good News: Alternatives To Government Debt Relief Options
The good news for many people in debt is that there are a number of debt relief options that dont include the government. There are solutions for people in good financial shape and for those in a financial hardship and struggling with credit card debt.
Anyone with a good financial situation and good credit should look at their budget, assets, and credit. Perhaps paying off debt more aggressively or taking out a debt consolidation loan will solve your problems.
However, if you are struggling to make your minimum payments, and want to focus on paying off your debt and not your credit, then consider a debt settlement program. Fortunately, the industry is regulated by the government, so you never have to make any upfront payments. Private industry, with firms such as BIlls.com sister company Freedom Debt Relief, now offer you debt relief in cases where the government cannot help.
Need Help Finding a Non-Government Debt Relief Tactic?
Is Government help not enough? With just a few questions and a soft pull on your credit, you can get a free personalized solution to help you get debt-free.
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Repayment Assistance Plan For Borrowers With A Permanent Disability
Borrowers with a permanent disability may apply for RAP Stage 2 immediately upon entering repayment without using RAP Stage 1. Through RAP Stage 2, borrowers with permanent disabilities are helped to pay off their loans in 10 years. For simplicity, the provisions for borrowers with permanent disabilities under RAP are called RAP-PD.
For borrowers with permanent disabilities, the calculation of the affordable payment is based on family income, family size, and disability-related expenses .
If you wish to be considered for RAP-PD, you must complete a RAP application On the RAP application, you must indicate that you have a permanent disability. If you were confirmed to have a permanent disability for the purposes of an OSAP application while you were a postsecondary student, no further documentation should be required. If your permanent disability was not confirmed for the purposes of an OSAP application while you were in postsecondary studies, you will be required to complete a RAP-PD Verification of Permanent Disability form. In addition, you will be required to provide medical documentation to support your permanent disability. To request a RAP-PD Verification of Permanent Disability form, contact the NSLSC.
What Is Provided For Under The Debt Relief Program
Under the Debt Relief program, the U.S. Small Business Administration will automatically cover payments on eligible loans, including principal, interest and fees, for a period of six months.
- For existing borrowers with a 7, 504, or Microloans, the U.S. Small Business Administration will automatically cover loan payments including principal, interest, and fees, for a period of six months.
- For new borrowers, the U.S. Small Business Administration will cover loan payments, including principal, interest and fees, if the borrower applies for and receives a 7, 504, or Microloan prior to September 27, 2020.
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Stage : Debt Reduction
This stage occurs after Stage 1, that is, after you have received RAP Stage 1 Interest Relief for a minimum of 60 months or you have been out of school for ten years, whichever comes first. All applicants for Debt Reduction must include proof of their reported family income .
If you have a Permanent Disability, you can apply to enter Stage 2 immediately upon entering repayment, without receiving any RAP stage 1 Interest Relief.
During the 6-month term of RAP Stage 2 approval, you will make either no payment or a monthly affordable payment, depending on your income and family size. Your affordable payment, if any, will go first towards paying down your loan principal and, if large enough, the remainder will go towards paying monthly interest. The Governments of Canada and Ontario cover all monthly interest and principal amounts not covered by your payment, so that your debt is eliminated within a maximum of 15 years from exiting school, or within a maximum of 10 years if you have a permanent disability.
Example:
Bens required monthly payment on a Canada-Ontario Integrated Student Loan is $400. Of this amount $150 is interest and $250 is principal. Bens affordable payment is $0.00. Therefore, for this term of Stage 2 approval, the governments of Canada and Ontario would pay a total of $250 per month toward the principal amount of the loan and $150 toward the monthly interest. Ben could re-apply for RAP Stage 2 after the term.
A Debt Consolidation Loan
If your situation isnt tremendously bad, traditional debt consolidation may work well for you. The process involves applying for a personal loan or line of credit from a bank and using that new debt to pay off existing higher-interest debt. This doesnt result in any debt reduction but does often provide for interest relief if your new loan has a lower interest rate than your previous debts.
While using a new loan to pay out another can be one of the best debt-relief options and is specifically effective when used to consolidate high-interest credit card debt it doesnt come without risks.
Risks of Consolidation Loans
- Consolidation loans can sometimes have a higher monthly payment than the debt you originally had. This is particularly true if you are having trouble with line of credit and other low-interest or interest-only payment debts.
- The approval of a consolidation loan is dependant on your credit score. If you have debt problems now your credit may already be impacted negatively and affect the odds of getting approved.
- Oftentimes people cite having multiple payments as the issue and want to consolidate those into one monthly payment. Sometimes there is merit to this issue, however, more often than not if, for example, 5 x $100 payments are unaffordable, then a single $500 payment would also be unaffordable.
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Financial Aid For Education
Federal and private resources can help with student loan debt. If youre still in school, your financial aid office has resources. Otherwise:
Federal Student Aid Part of the U.S. Department of Education, has information on grants and financial help. Some private resources for low-income students are QuestBridge, The Education Trust, Bloomberg Philanthropies and FinAId.
Student Loan Debt Relief
There is a wide range of methods for student loan relief. The best choice usually depends on the type of student debt you have federal or private.
Relief options for federal student loans that dont affect eligibility for other federal relief programs:
Private student loan relief options:
Its important to note that you can use private refinancing for federal student loans. However, it converts federal debt to private. You lose all eligibility for federal relief moving forward.
Also, discharging student loans through bankruptcy is not as easy as other types of debt. To discharge, you must prove that not discharging those debts will cause continued financial hardship. Its possible to discharge these debts through bankruptcy. But youll need a good attorney to get the results you want.
Need to find relief from student loan debt? Talk to a specialist now to find the right solution.
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There Isnt A Consumer Debt Relief Program Offered By The Government
Although the FTC has really cracked down on these deceptive mailers over the past year, there are still some companies that continue to send them out. There are certainly some legitimate consumer debt relief programs available to consumers, but if a company has to resort to deceptive marketing to get you on the phone, it is a safe bet that you would be better off not calling them.
When you call the 800 number on these mailers thinking you are getting information on a government program, what you will typically get is a high pressured sales presentation about some type of debt relief program. This program will usually come with high upfront fees that they will try and sneak into your monthly payments. In many cases, the upfront fees they are trying to extract from you are illegal as well.
At Pacific Debt, we have been offering debt settlement solutions, and debt relief solutions to consumers for 10 years. We charge absolutely no fees unless and until we can successfully negotiate a lower settlement with your creditors. We have an A+ rating with the BBB because our clients are our number 1 priority.
Visit our debt relief program page to learn more about how Pacific Debt can help you today.
Call the Debt Settlement Professionals at Pacific Debt for a Free Debt Reduction Analysis and learn how debt settlement can work for you when done right. View our debt relief section to learn more.
Free Grants And Grant Scams
If you receive information stating you qualify for a “free grant,” it’s probably a scam. Get information from the Federal Trade Commission so you can better recognize and avoid grant scams. If you have been a victim of a grant scam, you can file a complaint with the FTC.
Contact your state consumer protection office if you have purchased a book or paid a fee to get grant information and are not satisfied.
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Payday Loan Debt Relief
If youre in trouble with payday loans, then debt settlement is usually the best option. These debts carry rates of 300% or higher. Finance charges stack up quickly. You want to get out of debt for a percentage of what they say you owe.
That being said, if you have a few payday loans but most of your debt problems come from credit cards, you can include payday loans in a debt management program. This will consolidate the payday loans with your other unsecured debts. As a result, you can stop all those Direct Debit transfers that are draining your accounts and causing added fees.
On the other hand, if the bulk of your issues are with payday loans, use a debt settlement program.
Are There Grants To Pay Off Debt
Government and other relief programs offer grants money that doesnt have to be paid back to help with living expenses and more, for those who qualify. While there are no government debt relief grants, there is free money to pay off debt in that it will help you pay bills, giving you more income to pay on credit card and other debt.
The biggest grant the government offers may be housing vouchers for those who qualify. The local housing authority pays your landlord directly. Other government programs that provide long-term and temporary financial help for bills include the Low Income Home Energy Assistance Program , Temporary Assistance for Needy Families , the Special Supplemental Nutrition Program for Women, Infants and Children , help to pay student loans, and more. Well look at these in more depth below, including how to find them.
Be wary of offers to buy lists of government grant programs. They are usually frauds. There is no government program for credit card debt relief and legitimate debt settlement and relief programs operate by strict rules.
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Guide To: Free Canadian Government Grants To Pay Off Debt
Being in debt can be frustrating. It robs you of your joy, peace of mind, and you have to spend the rest of your life wondering how to settle it. So, if you’re looking for an easy way out of debt, we get it! The problem is, there are only so many options that you have.One, you can borrow money from friends and family members to settle the debt. Unfortunately, this sometimes doesn’t work! Payday loans with government benefits can also suffice if you make the cut. Another option that works a lot of the time is trying out free government grants.You’ve probably come across free government grants and have no idea how they work. The good news is, that’s what we’re going to cover in this guide. We don’t like to see how bad debt can ruin lives.That’s why we’re committed to providing reliable solutions to help single parents and anyone who needs help out of debt. So, let’s jump right in!
What Is Debt Consolidation
If youre wondering about the difference between debt settlement and debt consolidation, here are some details to keep in mind. Where debt settlement involves working with a debt relief company to settle your debts for less than what you owe, debt consolidation requires you to take out a new financial product to consolidate all your existing debts.
With debt consolidation, youll move all your old debts to the new loan with a lower APR or better terms. While the goal of debt consolidation is saving money, debt consolidation can also help you go from paying multiple debt payments each month down to just one.
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How Can I Get My Debt Forgiven In Canada
The only government-regulated debt forgiveness programs in Canada are consumer proposals and bankruptcies. These two programs are regulated by the Bankruptcy and Insolvency Act.
Outside of this, you can ask your creditor directly for relief but they will typically only defer interest charges for a short period of time. While this may be enough to get you ahead, in our experience, the duration of the deferral is rarely enough to allow people to catch up.
Financial & Debt Relief Resources For Canadians Impacted By Coronavirus
If your finances have been impacted by the coronavirus crisis, weve gathered key information below that may help you. We update this information regularly to keep it as up-to-date as possible. For more details on any relief measure mentioned below, please click on the appropriate link to learn more. Were just providing a general overview of financial relief measures that are available.
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Does A Government Debt Relief Program Actually Exist
With the additional government funding, financial hardship programs, and other government spending due to the pandemic it is completely understandable why we have seen an increase in queries related to the existence of government debt relief and debt relief for Canadians.
While many consumers have been able to refinance their house with a real estate secured debt consolidation loan, many have begun to look at other debt-relief options. Unfortunately, while many firms claim to offer government debt relief solutions they unfortunately do not exist as consumers believe they do.
While a debt settlement company may claim that these programs exist, they are often alluding to government-regulated debt relief options the consumer proposal and bankruptcy. Both of these programs provide relief from creditors for any unmanageable and/or outstanding debts with varying degrees of severity.
Other Options For Relief
If youre not sure you need professional help, there are other options you can use to find relief. Remember, debt relief refers to any solution that gives you a fast, easy, or cheaper way to get out of debt. There are plenty of do-it-yourself debt relief options to consider besides formal debt relief programs. You can work directly with a creditor or lender to find a solution you can afford.
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