Government Help With Credit Card Debt

Posted by as Ask Steve, Bankruptcy, Consumer Debt, Credit Cards, Get Out of Debt

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A question I am getting asked more and more is about what programs the government offers to help you get out of debt or to eliminate credit card debt. These questions usually involve inquiries about government grants and loans that people hear whispers about that they believe will dispose of problem debt as well.

Up until this point there has not been any interest or benefit to government to eliminate credit card debt through any sanctioned or legal process other than bankruptcy.

The elimination of debt seems like a public service that government could fill to help remove the weight of burdensome debt from the backs of consumers in trouble. But there is little logic behind the idea unless the government wanted to offer a bailout of consumer credit card debt in order to encourage consumers to resume their enthusiastic embrace of shopping and consumption.

Our capitalistic society operates in a symbiotic relationship between banks and consumers. Consumers consume, that drives orders, orders drive production and loans and credit cards help to fund both production and consumption.

The only remote connection between government and help to eliminate debt I guess would be the IRS recognition of non-profit credit counseling groups that offer debt management programs that make an attempt to assist consumers with problem debt.

Outside of that, let me be perfectly clear, the government, in particular the Office of the Comptroller of the Currency (OCC) actively blocks any government programs to eliminate debt. You can read more about recent efforts and blockage by the OCC here.

There are good reasons why the OCC blocks these attempts at consumer debt reduction since recently suggested plans have favored banks and have not been transparent to regulators and investors.

A government sponsored plan to eliminate debt and eliminate credit card debt could be crafted, I do see a way that it would be possible, but not only is there no such program but there is nothing on the drawing table as well, yet.

Steve

Source: Government Help With Credit Card Debt