Government Money to Reduce Credit Card Debt

When the Obama administration took over, one of its main initiatives was to help put the economy back on stable ground. Strategies for accomplishing this goal included the establishment of grants to help Americans get out of credit card debt. The overall American economy is made up of many parts, but when individuals and families are on steady ground, it contributes to the good of the overall economy. Find out how grants work and how these funding sources may help you to get out of the debt you are in.

Finding a Grant

The first step, and probably the trickiest part for most people, is knowing where and how to find a government grant to pay off debt. Start by contacting your county government, local associations and local organizations to find out what grants are available and for what purposes. The U.S. Department of Health and Human Services helps manage Grants.gov, a site providing information on a wide variety of federal government grants (see Resources).

Applying for the Grant

Grant applications can be long, labor intensive and tedious. When you obtain information on a grant you are interested in applying for, be sure to read the requirements carefully to make sure that you are eligible to apply. Once you pass the eligibility test, follow the instructions for completing the grant application very carefully and line by line. Grant application review committees tend to be sticklers when it comes to awarding grant money, which means it’s imperative that you complete the application completely and correctly. It’s also important to know the deadline of the grant application. Depending on the deadline, you may have a limited amount of time to complete what can be an arduous process.

Types of Grants

While most grants are not earmarked specifically to help you get out of debt, you may be able to find grants based on a personal need, business need, ethnicity, religion and more. You can also look to local organizations and associations. These organizations receive money from the federal and local governments to fund specific projects or support specific initiatives.

Debt Consolidation

While you probably won’t locate a grant with the title “Grant for Debt Consolidation,” you may be able to locate available government money based on how you got into credit debt in the first place. For example, if you funded the opening of an art gallery and backed a local artist and this is what put you in credit card debt, then the local art council may offer grants for local art projects. While some grants require that you apply for the grant before funding the project, other grants will allow you to pay in reverse order—you pay first and pay off the debt with grant money later. You’ll only be able to pay off expenses directly related to the project and you will have to provide evidence of what you spent and what the outcome of the spending was, but it is a way to use grant money to consolidate existing debt.

Tips

Register on websites such as Grants.gov to find and apply for possible grants. You can signup to receive email announcements when new grants are added to the database. this helps to ensure you meet the grant application deadlines.