Debt is sort of like mold in your attic. At first, it isn’t that big of a problem, but as time goes on, it grows and spreads to every corner of your home. Debt in moderation can actually be a good thing. It gives you a jump on financial matters, help you start your own business, and make it possible to build up a good credit start. That said, when debt gets out of hand, it can be very hard to restore your financial stability and rid yourself of this scourge. It has often been said that debt itself is the true loan shark. Today we’re going to have a look at the different types of government debt relief programs that you can use to relieve yourself of this financial burden that has come upon you.
Debt Relief Grants Programs
1. Standard Student Loan Repayment
This is one of the most popular plans among those who wish to rid themselves of the student loans that have been looming over their head ever since they first entered college. It is one of the fastest ways to repay all your student loans, but, in turn, also holds one of the highest payment rates. That being the case, you should avoid this plan if you’re living on a limited income. Let’s look at the pros of this program though. If you execute it right, you could rid yourself of all the student loans in a decade or less. That’s pretty impressive compared to the length of time that other people have to worry about student loans. Another benefit to this plan is that it comes with no strings attached and you can switch to a different program at any time — perhaps because your income has dropped and you can’t afford the rate at which these monthly payments are given.
2. Pay as You Earn
The Pay as You Earn program is another way that you can relieve yourself of student loans. That being said, it’s actually harder to qualify for than most other programs. In addition to proving financial hardship, you’ll also need to qualify for some chronological requirements. So, what do we mean when we say chronological requirements. Well, in a nutshell, your debt has to be new. If the debt was taken prior to October of 2007 then you won’t be able to qualify for this program. In the same way, if you have not received a disbursement since October of 2011 then you will also not be able to qualify for this program. As you can see, this program is quite time-sensitive. If you do qualify though, you’ll have an easier time meeting payments seeing as you’ll only be paying 10% of your income. That’s far lighter than the other programs that are offered to those trying to relieve themselves of student loans.
3. Home Affordable Refinance Program (HARP)
For people who owe more than their homes are worth, refinancing a mortgage can be next to impossible. HARP program allows borrowers with little or no equity to refinance into more affordable mortgages without new or additional mortgage insurance. With HARP you can refinance your mortgage with lower interest rates and shorter loan term.
If you’re struggling to pay for your heating and cooling bills, you could turn to LIHEAP. The acronym stands for Low Income Home Energy Assistance Program and could make utility shutoffs a thing of the past. Beyond helping you pay your bills, this program could even provide funding for home improvements that make your house more energy efficient and lower your utility bills. As you can see, LIHEAP helps you pay off any existing energy debt while ensuring that it won’t happen in the future by making your home far more efficient. LIHEAP just goes to show that you can protect the environment without putting a financial strain on yourself. In fact, often times, you’ll find that lowering your carbon footprint can actually improve your financial situation and reduce debt.
A government program that could make it far easier for low-income families to pay for the medical bills that may have piled up. There are varying eligibility requirements for Medicaid that will shift from one state to another. You’ll need to check on your state’s requirements to see if you qualify for Medicaid. It’s worth noting that Medicaid is actually a joint federal and state program showing how much good can be done when the macro and micro-governments work together to better the lives of the general population.
6. Drug Coverage (Part D )
Part D is a program under Medicare that covers the costs for the prescription drugs of those who qualify. It was implemented by President George W. Bush in 2003 but didn’t go into effect until 2006. Before applying for Medicare Part D, you should see if you’re covered for free prescription drugs under another program such as TRICARE or even your worker’s union. Many people find themselves exhausting their savings on the prescription drugs that they need to stay healthy, but now, thanks to Part D, you can stay alive while staying financially stable. Those who are below the poverty line could get low-income subsidies that help them pay for some or even all of the costs that the program’s premium brings. Bear in mind that there are some drugs that have been excluded by the program. Most excluded drugs have become such due to the fact that those running the program believe them to be either non-essential, subject to abuse, or both. These include drugs for erectile dysfunction, anorexia nervosa, weight gain, fertility, hair growth, and any medications used for the symptomatic relief of coughs or colds.
The best solution
I’m sure the Centers for Disease Control and Prevention would agree with me on this one: prevention is the best cure. The easiest way to relieve yourself of debt is to prevent it from turning into a problem in the first place. That said, if you happen to fall into one of the black holes of finance that has become so common in recent years, you might be able to find some programs that help you escape its gravitational pulls. Whether it’s a lost job, financial collapse, or sudden injury, there are many things that can throw you out of financial stability. We hope that this article and the programs it contains will help you get back into your groove so you don’t have to file for bankruptcy. Do you think we missed any programs on this list? Feel free to let us know if there are any programs that should be on this list, or if there’s anything noteworthy that should be added to any item already contained within this article.