Many individuals and families in Virginia as well as in other parts of the country in need of debt relief have wondered whether a grant would help them out of their high-interest credit card debts and other types of unsecured debts, such as medical bills, department store charges, or even utilities. Many of these residents, in their search for much-needed debt relief, even look for government-funded grants or government debt relief grants.
Maybe you are in a similar situation - someone who, as a result of some unforeseen event, has recently experienced a reduction in income. Yet, while the federal government has provided bailouts for banks and other types of financial institutions, it does not offer any financial aid or grants that can be used to pay off consumer debts.
The good news is, there is help available. These days, there are several debt relief options available - including debt consolidation, debt settlement, or even bankruptcy - that can alleviate the stress from rising credit card debts.
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How To Reduce Debts
As mentioned earlier, many consumers have been able to reduce their debts through a process known as debt consolidation through a credit counseling agency, or what is also referred to as a debt management plan (DMP). When you enroll in a debt consolidation program, credit counselors will, initially, review your finances, debt amount, and income.
Afterwards, they will typically create a strategy to help reduce your debts and submit proposals (on your behalf) to creditors asking for a reduction in interest rates, or the elimination of any late fees and other penalties. The goal of debt consolidation is to provide you with a single, more manageable, and more structured payment plan - one that will let you, hopefully, direct more of your money towards paying the principal of your debts versus simply just paying the interest.
Another viable debt relief option for many consumers is debt settlement, a process where you hope to settle or negotiate with your creditors for substantially less than what you actually owe. In many cases, consumers in a debt settlement program are advised to stop paying their credit card bills so that they can save up funds, over a certain period of time that they can use to make a reasonable settlement offer.
In many cases, creditors may threaten to take legal action against consumers that default on the terms of their credit card agreements - which will likely result in a decline in one's credit scores. Yet, in spite of the potential risks, debt settlement remains a popular alternative to bankruptcy - which can have a more devastating and longer lasting impact on personal credit.
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The Credit CARD Act of 2009
Even though the government does not directly offer debt relief grants or bailouts to consumers like you, it has made significant changes to credit card legislation to protect and maintain your rights. Signed into law by President Obama, the Credit CARD Act of 2009 (See Fact Sheet Reforms to Protect American Credit Card Holders) requires creditors to provide 45 days notice if they are planning a rate increase. The Credit Card Act of 2009 also requires credit card companies to allow you to cancel the credit card in question and pay the card's balance at the older rate - not at the new, increased rate.
In addition, the Credit CARD Act of 2009 bans credit card companies from retroactively increasing rates on a cardholder's balance in good standing for reasons (like applying for new credit or buying a new car) that are unrelated to the card holder's payment history with that particular card.
While the government does not generally provide consumer or credit card debt relief in the form of grants, it does offer a variety of programs that can assist consumers who are overburdened with debts. For instance, if you're in a similar predicament where your bills have piled up and your income has been reduced and you may be forced to forego the essentials - such as medicine, food, and utilities. Fortunately, in Virginia, programs like Temporary Assistance for Needy Families (TANF) or the state's Virgina Department of Social Services are examples of how the government offers assistance.
These programs reach out to financially-strapped residents and provide assistance in the areas of food and nutrition, child care, energy assistance, and job training, among others.
The bottom line is, no matter what method you choose to get credit card debt relief - whether it's in the form of debt consolidation or debt settlement - or perhaps you simply want to take advantage of a government-funded program to assist with your needs - there is help available for you.
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