• Government programs for individual debt relief are limited.debt defined image by Christopher Walker from Fotolia.com
  
  While claims abound that government money is available for individuals to pay off their debts, this is simply not true. Government programs do support non-profit debt counseling agencies, facilitate mortgage refinancing, and help forgive student loans. Government programs also assist low-income individuals with food, housing, utility bills, and medical care. Finally, bankruptcy is a government debt-relief program, though it is usually regarded as a last resort. Companies that advertise "stimulus money" or "government money to pay credit card debts" attempt to sell information and/or services you can obtain for free.
  
  

Legitimate Debt Relief Counselors

• Many government-funded organizations such as housing authorities, branches of the U.S. Cooperative Extension Service, universities, credit unions, and military bases operate free credit counseling programs. Your local bank or consumer protection agency may be good sources of information and referral. Debt counselors will help you negotiate with your creditors and consolidate payments. According to the Attorney General of Washington state, "Beware of companies that offer 'free' advice on how to get government grants or a stimulus check. Contrary to claims found on many websites, the federal government does not award grants to help consumers pay general debt."
  
  

Mortgage Debt Relief

• Government mortgage relief is offered to selected debtors. These programs were designed to help the neediest homeowners avoid foreclosure by refinancing their mortgage to obtain a lower interest rate. This is not debt cancellation, but penalty-free refinancing and is available through the Federal Housing Administration. The IRS now allows homeowners who experienced foreclosure between 2007 and 2012 to be excused from certain taxes, in accordance with the Mortgage Forgiveness Debt Relief Act. This applies to borrowers who lost their assets and were forgiven a certain portion of the obligation by the lender.
  
  

Student Debt Relief

• If you owe money on a federal student loan, your debt may be forgiven if you enter a public service career. Income eligibility rules apply. The Federal Student Loan Forgiveness program is for low-paying teaching jobs, those serving in the armed forces, and those serving in other public service jobs.
  
  

Debt Relief Through Bankruptcy

• If you cannot pay your debts as you have been without foreclosures and defaults, you may be protected by Chapter 13 Bankruptcy. The debtor submits a new payment plan which the court will review to determine how much of your debt must be repaid, then ask your creditors to accept the new terms. If you do not have the income to make the payments for Chapter 13, you may file a Chapter 7 bankruptcy. Your assets, if any, may be liquidated, but in the end, debt obligations will be canceled.