People trust that the government will treat them fairly and not try to rip them off.
Meanwhile, consumers struggling under a mountain of debt are vulnerable and easy prey for scam artists.
It makes sense to see if government entities provide free debt consolidation programs or loans to relieve distressed borrowers.
You will find that several agencies regulate these affairs more than they sponsor or approve them. However, the government does redistribute money from the wealthy to those less fortunate. Tapping into these government-approved benefits frees you out of debt faster than any consolidation program or loan.
Debt Consolidation Programs
The federal government does not offer free debt consolidation programs or approve companies providing this service for American consumers. However, you might find some relief by applying different labels to other benefits and laws.
You will be hard-pressed to find free government grants for debt consolidation that are legitimate. If you find an online resource touting federal sponsorship, be very wary.
Free grant money for bills and personal use can reduce future expenses, releasing funds to pay off existing obligations. The government targets financial help to specific populations and needs.
Federal departments award grants to universities, state agencies, and non-profit organizations, not directly to individuals with personal needs. However, applying at each endpoint can lower costs, which equals debt relief.
Credit Card Relief
Likewise, you are unlikely to find a free government credit card debt relief program as no federal agencies get involved in promoting the forgiveness of revolving balances.
However, government-enforced bankruptcy laws provide potential credit card debt relief to struggling American consumers.
- Chapter 7: absolves the debtor of most obligations
- Chapter 13: establishes a repayment plan spread over time
Private debt relief companies use the threat of a bankruptcy filing to entice credit card companies into a settlement. When the bank fears getting nothing, it might forgive a significant portion of the amount owed for immediate partial payment.
(Sponsored Link- National Debt Relief is Not Affiliated with the Government)
Debt Relief For Seniors
The federal government does not provide free debt consolidation programs for seniors. However, retired older adults have two advantages when seeking relief from burdensome revolving balances.
First, government benefits for seniors over 65 run the gamut and can help retired adults improve their finances to get out of credit card debt. Leave no stone unturned.
- Supplemental Security Income
- Medicare & Medicaid
- Social Security Retirement Income
Second, credit card companies cannot garnish social security retirement benefits or seize pension funds governed by the Employee Retirement Income Security Act (ERISA), which can take several forms.
- 401K Holdings
- Deferred Compensation
- Employee Welfare Benefits
There is no such thing as a government-approved free debt consolidation program. However, the Department of Justice endorses two types of providers connected with bankruptcy filings.
- Government-approved credit counselors assist individuals before filing for bankruptcy
- Government-approved debtor education providers help consumers after a bankruptcy filing
Debt Consolidation Loans
Government debt consolidation loans are rarely legitimate as only one federal agency (the Department of Education) gets involved in lending money to individuals.
You cannot borrow your way out of debt. Therefore, benefits that reduce future spending are a better bet when compared to taking out another loan.
Get Out Of Debt
You will not find government loans to help you get out of debt. No federal agency lends money to individuals except the Department of Education (see below).
Plus, a loan does not help you get out of debt. Only repayment of the obligation accomplishes this goal, which requires an increase in income or a reduction in expenses.
Free government money you never pay back can help you reach your debt reduction goal more quickly than a consolidation loan. Tap into every conceivable resource to cut various bills: medical, energy, groceries, water, housing, and phone service.
The government does not sponsor debt consolidation loans for medical bills. However, several federal agencies administer programs that help families lower health-related expenses.
Government grants to help pay medical bills work better than loans because you do not have to repay the money. Consolidating debt lowers the monthly payments by reducing the interest rate (rare) or extending the repayment term (most common). Tap into these cost-saving alternate resources instead.
- Charitable organizations that help families with medical costs
- Hospital charity care (unpaid services for low-income)
- Medicaid covers doctor bills for three months retroactively
- Bans on surprise medical bills from out-of-network providers
- Tax-deductible medical and dental expenses
- Disability insurance to replace lost income
The Department of Education offers the only authentic government debt consolidation loans. The department allows graduates to combine multiple federal education loans into one contract at no cost to the individual.
Complete the free Federal Direct Consolidation Loan Application and Promissory Note as your first step. It should take about thirty minutes to complete the form. Be prepared with personal and financial information to speed the process.