Does government debt relief exist, and if so, what exactly are your options? While some of us will use our stimulus checks to pay down debt, others are looking for a little more assistance from the government. But there are some misconceptions about what the government can actually do to provide debt relief.

1. Is Government Debt Relief an Option?
Does government debt relief exist, and if so, what exactly are your options? While some of us
will use our stimulus checks to pay down debt, others are looking for a little more assistance
from the government. But there are some misconceptions about what the government can
actually do to provide debt relief.
Government Debt Relief and Grants
There are a lot of advertisements and articles claiming that an abundance of federal grants exist
that will provide you with debt relief. They say you just have to know where to look. But have
you ever noticed that they never tell you where to look? That’s because these grants to help you
pay off your debt don’t exist. There are a variety of programs that assist low-income families to
afford necessities, such as rent and certain utilities, but there are no grants that help you pay your
credit card debt. Beware of companies advertising such grants: these are sometimes scams that
actually end up leading to bankruptcy.
Student Loan Consolidation
Individuals or parents struggling to pay back one or more federal student loans can find some
relief in federal student loan consolidation. This program allows you to consolidate your loans
into one that has a lower interest rate and one convenient monthly payment. However, this form
of debt relief applies ONLY to federal student loans that you took out. Any private student loans
are not eligible for a federal student loan consolidation.

2. Mortgage Debt Relief
The one area where government assistance has recently become available is in the realm of
mortgage debt and possible foreclosure. Due to the sub-prime mortgage meltdown, the U.S
Department of Housing and Development (HUD) now offers the FHA Secure loan program for
those who are at risk of foreclosure and need to refinance their sub-prime mortgage.
Benefits of the FHA Secure Loan Program
The FHA Secure program allows you to refinance your sub-prime or adjustable rate mortgage to
lower your interest rate and change the terms of your loan. As a result, your monthly payments
will become more affordable, and you will be able to keep your home. With more affordable
mortgage payments, you may even have some extra cash to pay off credit card debt or other
loans.
Who Is Eligible for FHA Secure?
Not everyone with a mortgage is eligible for this program. You have to meet some eligibility
requirements before you can take advantage of the program and reduce your debt. Those
requirements are:
* The original loan cannot be an FHA-insured loan.
* You must have an adjustable rate mortgage with a rate that resets between June 2005 and
December 2008. Anyone with a fixed rate mortgage is not eligible.
* This program is intended for those borrowers who had trouble paying their mortgage after
their rate reset to a higher rate.

3. * You must have a clean payment record for your mortgage during the six months before your
rate reset. If any of those payments were late, you will not be eligible.
* You must be able to demonstrate the ability to make all future mortgage payments at the
new rate, including sufficient income and employment stability.
* The home that the loan is for must be your primary residence.
If the above debt solutions don’t apply to you, there’s no need to worry. Federal assistance isn’t
the only way to reduce your debt. Educate yourself about all the options and improve your
financial health today.
For more articles on Government Debt Relief, visit: Bills.Com