Government Grants to Pay Off Debt

The current economic crisis is hitting home in households across America. Many families are in such bad situations, the only way out they see is to file for bankruptcy. However, there may be another option to help individuals overwhelmed with debt.


You’ve seen the late night infomercials claiming there is free money for the taking. Some claim our government actually offers grants that can be used to pay off debt. Why would our government give out free money? The stated purposes of debt relief grants are to prevent individuals from going deeper into debt by taking out new loans to pay off existing loans and to help individuals sustain their credit ratings.

Unlike consolidation loans, grants do not have to be paid back. The only qualifications are that you be a US Citizen and over the age of 18. The key is writing a successful application and convincing the reviewer that you deserve that money. Still, aren’t there millions of Americans that could present a convincing argument that they deserve federal assistance? Have you ever heard of anyone receiving such assistance?

I set out on a search to find more information on federal government grants to pay off debt. It is true the government offers several grants for varying focuses from developing the arts to assistance to homeless veterans. The Catalog of Federal Domestic Assistance ( tracks over ten million dollars in federal money that is allocated to domestic assistance programs.

However, it seems few grants are available to individuals. Even federal grants for education are typically issued to the educational institution which then offers aid to students. There are some grants available to individuals, but you must be careful to search for grant opportunities available to individuals – most are only open to organizations.

Upon visiting a government website I found my way to a grant edibility page that explicitly stated they do not offer money for personal financial assistance or debt. They did offer links to other assistance programs such as social security, Medicaid, student loans, and small business start-up loans – but definitely no grants for debt relief.

I found my way to the Federal Trade Commission’s page on debt. They state, “If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy.” Notice there is no mention of grant monies available.

Yet, if you search for federal grants to pay off debt, there is no shortage of sites advertising free grant money available for you. Some even offer help in preparing your application, for a fee of course. I even found one site that claimed, “People who are in the highest class donate certain amounts of millions to the foundations that offer these debt relief grants. They are actually required to do so if they intend to remain in a specific tax bracket.”

For me, I’m going with if it sounds too good to be true then it probably is. I’m not so sure I believe our government has grants available to anyone who has racked up considerable credit card debt. If you want to pursue this option, I’d highly recommend going to a government website to find more information and not trust any other websites offering to help you.

Download the complete Guide to Government Grants to learn exactly how to find and obtain free government grant money.