What are the different types of debt settlement grants you should know? In this tough economic situation, most of the debt-stricken consumers can’t control the distressful financial situation. As a result, the consumer debt is incessantly mounting. The government introduced the program but it’s available to people who’re in dire need of financial assistance.
The federal government provides assistance for certain types of debts like mortgage and student loans. If you find any agency that claims to help you obtain federal grants for debt settlement, then beware of these scam agencies.
You may not be able to obtain grants to settle your credit card debts. However, if you’re eligible for the grant, you can use the money to pay off your debts. In case you’re unaware of the different types of debt relief grants, then you can check the government grants available for you. 
Debt Relief Programs
Debt relief is available in various forms, such as debt consolidation, debt settlement, and also bankruptcy.
Debt Consolidation
Debt consolidation involves a new loan or new debt and then use it to pay off the existing debts. The new debt will then offer a smaller interest rate compared to the old debts, creating payments per month less expensive.
Borrowers who are not facing debt trouble can take the benefit of debt consolidation loans. For instance, the loans can transfer the existing credit card balances to the new card, with little or no interest during an initial period. Or, they can offer a home equity loan and then use it to pay off the credit cards.
In case that the borrowers have a lot of debt, getting a new credit at a good interest rate will not be easy. To solve this matter, you can consult with a credible credit counselling agency.
They can advise on what types of consolidation loans that are available to you and then provide other alternatives. Besides, credit counselling agencies usually help arrange a payment plan by working together with our creditors to stretch the debt repayment for a more extended period of time.
Another solution you can try is by contacting your creditors and starting a negotiation. Some creditors may accept the smaller minimum payments per month or change the due date per month. So, they will get the payment regularly, instead of no payment at all.
Debt Settlement
This alternative is different from debt consolidation. It will not change the amount of the debt. The purpose of debt settlement is to pay off the debts for a smaller amount.
You can talk to the creditors by yourself. Alternatively, you can hire a debt settlement company so they can handle everything for you. Be sure that this area has a high risk of fraud. The legitimate debt settlement companies may come with fees and some significant damage to the credit score you have right now.
Based on the National Foundation for Credit Counseling, the amount of debt settlement companies charge can be different. The range is for about 15%-25% of the entire debt. The group adds the process from three to four years. If there is any forgiven debt, then it will be taxable income if it is more than $600.
Bankruptcy
Bankruptcy is the last option to get out of debt, and it brings severe sequences. This condition will exist on your report for 10 years. But many Americans choose this option. For instance, back in 2022, there were 388,000 personal bankruptcy filings in the U.S.
When it comes to bankruptcy, it means a trustee will sell your assets, except for particular exempt ones. The trustee will use the proceed to help you pay back the creditor. The remaining debts then will be discharged, but it will remain on your credit report for 10 years.
Three Types of Debt Relief Grants
Here are the different types of debt settlement grants that can be beneficial for you to eliminate your financial obligation:
Homeless Prevention and Rapid Re-housing Program (HPRP)
Homeless Prevention and Repaid Re-housing Program is designed for consumers who’re behind payments and on the verge of losing their shelters. This grant is funded by the American Recovery and Reinvestment Act of 2009. Well, the US Department of Housing and Urban Development monitors the HPRP.
The State of North Carolina provides HPRP assistance in collaboration with the Housing Finance Agency (HFA). The residents who are eligible for the financial assistance can get help from the HFA. These people are offered help to pay rent, security deposits as well as moving expenses. However, HPRP is available for rental housing expenses, but this program is not designed to prevent foreclosure.
LIHEAP
You can qualify for a Low Income Home Energy Assistance Program if you get a disconnection notice for not making timely payments on the utility bills. Generally, the states, as well as the United States territories, receive block grants from the U.S. Department of Health and Human Services that sponsors LIHEAP.
You can be eligible for LIHEAP if you meet the income limits. The grantees supervise the program through local state government as well as non-profit agencies. The guidelines of the program may vary from state to state, so you need to go through the guidelines before applying for the grants.
Local Programs
Some of the local government offer programs to assist the residents facing financial hardship. You can apply for the program with basic problems related to housing. The Housing Assistance Programs are only available for disabled as well as low-income residents. This program can only assist you to pay mortgage, rent or utilities.
Therefore, you need to consider your financial situation and the types of debts you owe in order to take financial assistance that can be beneficial for you. To know more about debt settlement you can visit here: http://www.debtconsolidationcare.com/debt-settlement.html
Summary
When you get into more debt than you can handle, then you can solve it by taking the debt relief. However, all types of debt relief may bring negative consequences. The debtor must understand before taking for further actions. That is all about different types of debt settlement grants to know.
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