There are times in our lives when we get down on our luck and need a bit of assistance. Our living situations can change at the drop of a hat. Jobs can be lost unexpectedly or a car accident could cause serious injuries putting you out of work for a period of time. The four main areas of assistance are for chapter 7 bankruptcy, chapter 13 bankruptcy, student loan debt and mortgage loan debt. Each government debt relief program has its very own set of guidelines and who these programs are able to assist.
Mortgage Relief Assistance
For homeowners that are behind on mortgage payments, there are several programs that are both state and federally funded. Local services can assist you in preparing the necessary application paperwork for the programs. The Mortgage Forgiveness Debt Relief Act provides assistance to qualified homeowners that were forced into foreclosure. The idea behind this act is to forgive the taxes on the foreclosed home.
Another part of this act is to work with the FHA to refinance a mortgage to make it free from penalties. It applies to those that had adjustable rate mortgages that can no longer be afforded. Interest rates have risen and fallen, the rises do make it hard, and in some cases impossible, for homeowners to afford. This program ensures that their rates are affordable so that they can keep their homes.
Student Debt Forgiveness
This forgiveness program is available to students that receive government grants for schooling that choose to take a career path in public service. The debt that cannot be repaid from the loan or grant is forgiven. There are restrictions for this program. Those restrictions include income barriers, and loans that are transferred from private to federal in some cases. Those that are eligible for this type of relief include military personnel, lowly paid teachers and other jobs in the public services sector.
Chapter 7 and Chapter 13 Bankruptcy Relief
Although this is not a traditional assistance program, these two types of bankruptcy were put in place to help erase debt so that you can start over and get your life back on track. With Chapter 13 bankruptcy, you can file for it and name your creditors along with prove your inability to pay. This gives you the option to restructure payments so that they are affordable. In regards to Chapter 7 bankruptcy, is in place for those that absolutely do not have the income to pay off their debt, even with a restructured payment plan. The bad thing about Chapter 7 is that you have no control over the outcome once a judge has ruled on the situation. You will be free from debt, but it may leave you in a worse situation than before.
Additional Relief and Assistance Programs
The major programs have been mentioned above. There are programs available for IRS tax relief if you owe a large amount of back taxes and are unable to pay. You can work out a payment plan that fits into your budget, with reduced or waived fees if your income is proven to be minimal. It is important to remember that not everyone will qualify for government debt relief programs. Medical debt relief, home improvement assistance and help with other debt is available to those that have had something significant happen, such as the death of a spouse, job loss, or major medical illness or injury that makes it impossible for the bills to be paid. Every program, as mentioned above, has its own set of guidelines and income restrictions. Speak to a debt relief counselor to find the program that is right for you and be sure to ask about the risks so that you know what you are getting into.