Government Debt Relief Programs

Need information concerning government debt relief programs? The current state of the economy has prompted the government to offer various programs to provide debt relief to citizens. The most common programs designed to assist citizens with mortgage payments are Chapter 7 bankruptcy, Chapter 13 bankruptcy and Consumer Credit Counseling. These debt relief programs offer citizens the chance to find relief from a mountain of debt.

1. Harp Program The Harp Program, which is also known as the home affordable refinance program, was designed to provide relief to homeowners who were struggling to make loan payments. Many of the targeted homeowners owned loans with adjustable rate mortgages. Homeowners were able to refinance using Harp loans and lower interest rates and payments. This program allowed many potential candidates for foreclosure to keep their homes.
2. Chapter 7 bankruptcy When a consumer chooses to file a Chapter 7 bankruptcy they are essentially stating that they want a full liquidation of all assets for debts. This is the most extreme form of bankruptcy. The credit rating of the debtor will be affected for seven years and they may not be able to purchase major items or get certain jobs. This government debt relief program must be used with caution.
3. Chapter 13 bankruptcy When a debtor files Chapter 13 bankruptcy they are essentially setting up a payment plan. The debtor agrees to pay a particular amount to trustees who make installments to creditors. During the bankruptcy period debtors are granted relief from collection efforts. Once the debts are paid the bankruptcy is discharged.
4. Consumer Credit Counseling Debtors receive services through consumer counseling agencies when they are unable to afford their current debts. These services were developed to prevent bankruptcy. The consumer credit counseling agencies are nonprofit that are approved by the United States government to contact creditors and develop payment plans on behalf of the debtor.
5. Mortgage Debt Relief Act This bill allows taxpayers to gain relief from taxes related to discharging debt on their primary home. This includes property that was forgiven for any reason of debt. Common affected individuals are those who have received foreclosures, reposessions, bankruptcies and canceled debts.