There are government debt relief programs available for citizens of the United States, but it is important to realize that the services target very specific types of debt. In general, the government does not provide grants or other financial services for normal credit card debt. They do, however, have programs that can help with student loans and debt related to mortgages. Essentially, the government will only provide assistance with debt that is related to a federal institution.
Some student loans are federally backed. If a student loan has fallen into arrears or is threatening to do so, then there are government programs that can assist through debt consolidation. Debt consolidation is when a number of loans are combined into a single loan. This can have the advantage of reducing the overall amount of interest paid and it also can simplify paying the loan because only one payment needs to be made each month.
There also are instances where a student loan can be fully or partially forgiven, removing the debt completely. These types of programs can be very dependent on the field in which the debtor works. The idea is that a loan will be forgiven to some degree in exchange for a period of working for the government at an assigned location. This is common with teachers and doctors. The period of time required is usually measured in years.
The other type of government debt relief deals with mortgages and homeowners. Several programs exist, but most of them provide either mortgage modification or lowering of interest to make monthly payments more affordable. These programs usually have very strict guidelines for someone to be eligible, but they also can provide a lifeline that prevents foreclosure on a home.
While they are not direct government debt relief programs, there are debt counseling services available that are certified by the government as being legitimate. Debt counseling involves helping a person or family get a handle on household finances by creating budgets and giving advice on spending. In situations where there is debt and a steady income, debt counseling could be the best option.
Finally, bankruptcy through the courts is a drastic form of government debt relief. Through bankruptcy, any number of options could be employed. These can range from debt settlement, in which a loan is settled for a lesser amount than what is owed, to complete debt forgiveness. It will depend on the finances of the person going through bankruptcy. Bankruptcy should be a final option, however, because it will affect one's ability to borrow money and have credit for many years afterwards.
