Education, Personal Finance

How to find and use government debt relief programs

government debt relief programs

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We outline how to find government debt relief programs for student debt, medical debt, and dealing with debt collectors — and what to do afterwards.

When you think of the federal government, you likely don’t think of it as an entity that could help you with your debt. However, there are some programs that that can assist you with just that.

Government debt relief programs

Here’s how to find government debt relief programs, and what they have to offer.

Government Help for Student Loans

Student loan debt is the nation’s largest consumer non-housing debt. At more than $1.55 billion, student loan balances increased markedly between 2003 and last year, comprising more than 37% of all non-housing debt.

Why should the government care? Well, if your student loan debt is unmanageable, you might put off buying a house, for example, if you buy one at all. This hurts the national economy. As you struggle to pay down that debt, you likely won’t be doing much discretionary spending at all. That hurts, too.

Fortunately for you, most student loans are government backed, rendering them eligible for a variety of student debt relief programs. Ask your loan officer about them. In some cases, you can have your debt forgiven. You can also try loan consolidation or extension.

If you’re just in a short-term situation, you should look into government deferment or forbearance plans.

Government Help for Medical Debt

There are government programs that assist with medical bills and other debts incurred due to hardships. These are mostly local government efforts. In addition to medical debts, you may be able to get aid for utilities, drug prescriptions and even food. After all, the best government debt relief programs are those that have what you need – when you need it.

Government Help with Bill Collectors

Sometimes government “help” is in the form of legal protection. Yes, you’re in the unfortunate position of having bill collectors calling you seemingly day and night. But do you know you have rights? For one thing, you’ve got the Fair Debt Collection Practices Act, which restricts what debt collectors can do in their quest for repayment. For example, they may not use threatening or abusive language, phone you during certain hours or call you at your job if you ask them not to.

There are also governmental statutes of limitations on debts, which can seal you off from lawsuits or judgements, depending on your state, type of debt, and assets.

The federal government also offers consumer bankruptcy as a solution, although that’s a last-resort remedy. You may first want to use another option such as debt relief or consolidation.

Once Your Debt Crisis Has Passed

Sometimes bad things happen to good people. Perhaps there was a medical emergency or some other unexpected situation that left you unable to clear your debts. However, in many cases the issue was caused by excessive spending. What you need to do – must do – is make a household budget and stick with it.

If you aren’t bringing in enough cash, try to work more hours. Perhaps you need a part-time job, or a gig based on a hobby you enjoy.

If you must take on debt, be smart about it. Borrowing money via a personal loan can be a healthy way to get through a tough situation until you get yourself together – IF spending is under control.

You should also establish emergency savings so that you don’t have to whip out your plastic or go into debt when an unforeseen event happens. As it always does.

Keep a budget book

It is always important to get an overview of the income and expenses. This works particularly well with a house book. In these, not only the income, but also the expenses are recorded. This gives you a perfect overview, month after month, of the things you have bought and where the money ultimately went. You can also make comparisons in this way.

How you keep your budget book is up to you. We recommend keeping the shopping list. Whether it is written by hand, entered on the PC or recorded in an app, is purely a matter of taste.

First, record the monthly fixed costs. These include the following:

  • The rent or the cost of living (installments for building loans )
  • electricity costs
  • Gas / heating costs
  • Insurance

In addition, there are of course the running costs, such as:

  • Spending on groceries
  • Cosmetics
  • clothing
  • Cell phone bill
  • Bill for internet
  • Subscriptions
  • Fuel money or expenses for using public transport

Important: write down everything as detailed as possible. This means you can see every month where there is still potential for savings.

Conscious shopping

Many go shopping with the thought “I’ll see what’s out there”. It’s pretty dangerous, though. Often purchases are made that do not have to be. This makes it easy to avoid unnecessary expenses. Always make a fixed shopping list, from which you now do not deviate. If you buy food that cannot be found on it, you always ask yourself whether this is really necessary at the moment. Furthermore, it is always worthwhile to compare the different prices with one another, as immense differences can often be found here too.

Prioritize the fixed costs

Fixed costs can only rarely be changed. Not paying them in order to have more money available for shopping or hobbies shouldn’t even be an issue. Rent, electricity, gas, insurance and Co. should always come first and should also be paid for directly. However, that does not mean that prices should not be compared here. It is easy to get into debt even if these costs are too high. So you should always check whether the tariffs you are paying here really suit you.

So are the insurances really up to date and really no other electricity or gas provider offers cheaper tariff models for customers? A tariff calculator from the different areas can help to find the cheapest tariffs and thus save money month after month.

Save operating and electricity costs

However, you can save not only on the different tariffs, but also in everyday life. For example, use energy-saving lamps and rely on fully sealed windows so that no more heat comes out in the future. Furthermore, it is not infrequently advisable to lower the room temperature a little and not to overheat the rooms.

In addition, you should rather shower and forego bathing, so that you can save a lot of money every year. Likewise, the standby mode of any devices is to be avoided. It is better to turn this off completely, because power is also required in standby.

  • Always switch off all devices when not in use, not on standby
  • Take a shower instead of a bath
  • Always ventilate well
  • Use energy saving lamps
  • Lower room temperature
  • Compare tariffs with each other

Paying the bills

It is best to always pay your bills directly. Payment reminders and reminders will only make things worse. In addition, there are additional costs in the form of interest, so that numerous people were already so indebted that ultimately only a debt rescheduling helped, in which all open items were paid off together, including installment loans and debts to creditors. Failure to meet the payment deadline can, however, result in not only expensive dunning fees being added to it.

Summary

Having said all that, it’s good to know how to find government debt relief programs, just in case. While you’re at it, bone up on other financial strategies such as debt settlement. It’s always good to be prepared. Here’s to a debt-free life!