Bad Debts – The Government Might Be Able To Bail You Out

There are millions out there fighting off bad debts. Some declare bankruptcy and get the slate clean – but the cost of this maneuver is high. Your credit score will carry the mark of bankruptcy for about 10 years which would mean that the chances of your getting a loan at reasonable rates are almost nil.

What Are Your Other Options

There are many other ways – each one of them has its own plus and minus points and you would need to research well before adopting them. However, there is one option that many people ignore, which could be of great help – the Government grants option. Everyone knows that this option exists, but very few people make up their minds to pursue this avenue.

What Are The Benefits Of A Government Grant

1.No need to pay it back – this is the most beautiful part of this option. This is not a loan. This is a grant and you need not pay it back. There is no tax on this money either. This is money that can bail you out without implicating you further in any type of debt.

2.No collateral needed – when your credit score is low you would have a very tough time finding any financial institutions willing to lend you money. If they do, they would demand collateral from you as you are perceived a high-risk prospect. With the Government grant there is no need of collateral – since you need not pay it back.

3.A chance to start afresh – most Government grants are offered not only as a debt relief but also for starting small businesses. These programs are meant to enhance the economic platform in some regions and hence, you would also get a chance to set up your own cottage business. So you have a two-in-one good news here – (i) you get to be debt-free and (ii) you get an opportunity to start a small business as well.

4.Much less trouble than you think – a loan is much more difficult to obtain than the Government grant when your credit score is poor. If you pursue this line of thought instead of running after a regular loan, you would be able to free yourself from debt faster and on better terms.

5.No need to file for bankruptcy – a grant can provide you the much needed choice from committing financial suicide.

How To Get The Government GrantsYou would need to research a little and find out about the rules and regulations of obtaining a Government grant for debt relief and/ or small business in your State. Ensure that you gather all the documentation needed and pursue the matter vigorously. The effort required in pursuing a Government grant is no more than what you invest in obtaining a regular loan – and the benefits of the former are so much more.

Know Your Rights When You Are Drowned In Debt

Most people feel very depressed and vulnerable when they are swamped by debts and creditor’s calls to collect on those debts. You feel like you are surrounded by hostile agents who are out to get you, no matter what. You feel you have reached rock bottom. The silver lining here is that when you reach rock bottom, there is no other way to go but up. So, cheer up and learn about your rights when you are indebted – so you know how far is too far for the debt collection agencies/ collectors.

You Have Rights, Too – Exercise Them

You as the indebted person still have rights; rights that protect your privacy, your peace of mind and that give you a fair chance to get out of debt. Here, knowledge is indeed power; so ensure you know all about your rights when the debt collector calls on you:

1.No harassment – a debt collector agency cannot harass you for recovering their money. The definition of harassment included threats and threatening gestures, disclosing information about your debt at your office or place where you reside, publishing your name as a bad debtor, using insulting language, using violence, etc.

2.Misrepresentation of facts – the debt collectors cannot use false identities or misrepresent facts to intimidate you in paying up the debt. Many debt collectors offer you papers saying that they are legal – when they are not; enhance the debt amount; inform you of legal action that is not applicable to the situation at hand; say that they are sent by the Government or that they are attorneys, etc.

3.Threaten you with legal dire consequences – no debt collector should threaten you with arrest, attaching salary to the bank, confiscate your property, etc. unless it is permitted by the law to do so. This amount to intimidation under false representation of facts and is punishable by law.

4.False information – no creditor should send false information to the credit bureaus – these can be disputed once you learn about them – as these hurt your score and it is illegal.

5.Contact abuse – the debt collector should never visit your office unless you have asked them to meet you there. They should call on you only at normally convenient times, i.e. between 8 am and 9 pm. Calling at inconvenient hours is an offence under the law. If they try to contact you through a third party –the debt collector should not disclose that he/she was looking for you to collect a debt.

6.Self Identification – the debt collector should always identify himself/herself as a debt collector when they contact you; they should not assume any other identity to “catch” you.

All these guidelines and more are laid down by the FDCPA (Fair Debt Collection Practices) and are meant to protect you when you are struggling with your debts. Ensure you know your rights – it could save you a lot of grief at a time when you need it most.

There are plenty of ways to get ahead.  The first is so basic I'm almost embarrassed to say it:  spend less than you earn.  by : Paul Clitheroe