Government Debt Relief

To avert the repeat of the great depression of the early 1930s, the government swung into action and increased government spending to cushion the economic recession. The government debt relief program consists of a wide array of reforms aiming at stabilizing and reinvigorating the US markets. Under the American Recovery and Reinvestment Act of 2009 (ARRA), the Obama administration has promised to pump in 787 billion dollars over the next 10 years to help deal with the debt situation.

The administration also realized that almost 90 percent of the US revolving debt is credit card debt and something needed to be done about it. To help people deal with their credit card debt the government enacted the Credit Card Reform Act of 2009. This act made some much-needed reforms to the way credit card companies did business and arbitrarily changed the interest rates.

Government Debt Relief Grants

Out of the 787 billion dollars under the ARRA, 247 billion dollars are assigned as government grants. These grants are for education, health care, home improvement, etc. Most grants will be awarded to state governments, non-profit organizations and institutes working towards the betterment of society. However there are some individual grants that the average citizen is eligible for.

Government grants for debt relief like the federal Pell Grants will help students from low-income families get higher education. The maximum financial reward for the year 2010-11 was USD 5,500, these are need based grants and the grant amount is decided by taking into consideration the expected family contribution of the applicant. Other educational grants include Teacher Education Assistance for College and Higher Education (TEACH) Grants which gives up to USD 4,000 each year. Another educational grant is the National Science and Mathematics Access to Retain Talent (SMART) grant which gives up to USD 4,000 each year to eligible students. Some other government debt relief grants are business grants which mostly help minorities and women. The government also has home improvement grants which help low-income families remove health hazards from their homes.

Tax Credits

One of the most potent debt relief government programs is the tax reforms initiative. Tax reforms made under this program will enable many Americans to take home larger pay checks. One of the tax reforms enables homeowners to claim tax refund up to USD 8,000. Making work pay is another change to the federal tax table which enables individuals to claim up to USD 4,000 in work pay tax credit. As part of debt relief from the government, married couples can get up to USD 8,000 as tax credit, this reform is making a sizable contribution to the citizens pay checks.

Individuals can get tax credit for vehicles purchased in the year 2009. Individuals who bought vehicles costing up to USD 49,500 are eligible for tax refunds. Individuals who paid local or state sales tax can claim refund, people who brought vehicles from states with no sales tax can claim the fees they paid when purchasing these vehicles. Check the IRS website for details regarding all the tax credits promised as part of the government debt relief programs.

Government Debt Relief for Credit Cards

The mounting credit card debt in the US market prompted the government to enact the Credit Card Reform Act, this new act put curbs on some unfair business practices carried out by credit card companies. First and foremost it put restrictions on credit card companies from changing the terms of contract without notifying the customers. Card companies will now have to inform the customers at least 45 days in advance before making any changes to existing interest rates. Card companies will have to send the billing statements to customers 21 days prior to the due date. If the due date falls on a weekend or a bank holiday, it has to be pushed to the next business day. Credit card companies have been directed to stop unfair business practices like 'double cycle' billing and ambiguous use of the terms 'fixed rate' and 'prime rate' of interest. The new credit card debt relief act also requires card companies to have their contract terms and agreements online for government scrutiny. Companies cannot sell credit cards to people under the age of 21 unless they have proof of income.