Government grants as an option of debt relief is not very popular. This is basically due to the lack of awareness amongst the people. Every year billions of dollars are kept aside for the purpose of giving away as government grants. People do not opt for these grants for debt relief because they think that either these grants are not available to individuals or they are not eligible to apply for the same.

Why Government Gives Grants For Debt Relief

When people are debt ridden, their expenditure decreases. This reduces the demand for various things in the economy because people will not have money to spend. Slowly this affects all areas of the economy, with the result that the economy of the state / nation suffers. Therefore it is imperative that the people have enough spending capacity so that the economy prospers.

Debt Relief With Government Grants

Government grants are more easily available than other forms of loans. This is because grants unlike loans do not require collateral or any other form of security. These thousands of dollars got as grants can be used for starting a new business, the proceeds from which can be used to clear off previous debts.



Grants are also available for clearing off debts incurred due to specific reasons like health care, education, business expenses etc. For e.g. a debt incurred for health care purposes like hospitalisation, medical bills, etc. can be cleared with the help of government grants. Debts incurred for setting up a business can also be funded using government grants. This makes government grant an ideal debt relief instrument.

Are grants easily available?

Grants are easily available to those people who can prove to the government that they are not in a position to pay off their debts. The social service office elaborately studies the financial position, outstanding debts and repayment capability of the debtor before issuing the grant. This is to ensure that the grant is going to the extremely needy people who have no other means to salvage their debt ridden situation.

Advantages Of Availing Government Grants For Debt Relief

1. A grant is easily available because no collateral is required to be got for it. The debtor just has to prove that he is not in a position to pay off his debts.

2. A grant is an aid from the government. It is not a loan. Hence it need not be paid back. It is both interest-free and non-taxable. It is given with the sole purpose of getting the finances of the debtor back on track, thereby making him debt-free subsequently.

3. With the availability of government grants for debt relief the debtors are saved from declaring bankruptcy.

4. Grants in comparison with other form of debt relief are a better option because they make the debtor debt free instantly.

Government grants are therefore an ideal debt relief option for those debtors who have no other option but to declare bankruptcy.

Past due accounts receivables are a constant problem with many businesses especially during any economic down turn. Sometimes the time and effort to get paid will exceed that needed to make your business grow and function efficiently. This makes an efficient system of contacting your past due accounts very important. There are basically four stages of debt recovery that are employed by businesses.

Initially a business that has past due account receivables will use its own resources to contact the customer. In most cases this is done with debt collection letters. Normally the first collection letter is sent out within 15 days after an account is past due. This is normally a gentle reminder that the account is past due and a request that they contact your business if there are any questions or they need assistance.

Second debt collection letters are normally sent after another 30 days have passed and the customer has not made contact with you. The letter should again state the amount that is past due and how long it is past due. Enclosed with the letter should be copies of the original invoice. Again you should urge the customer to make immediate contact with you. Offer incentives to make the payment and let them know that you are willing to work with them. Note that failure to take action could mean filing a report with the business credit bureau or turning the account over to a collection agency or a lawyer. Always include a self addressed envelope with a stamp to encourage a response.

If the past due account does respond to the second collection letter it is a good bet that further debt collection letters and contacts will be unsuccessful. You may consider using the telephone to contact the customer however you must be well prepared with a script that keeps you focused on the collection process. In most cases unless you have had the proper training telephone collections are best left to the experts.

The next step in the collection process is to employ a collection agency to recover your past due accounts. Collection agencies are expensive to use many times requiring large upfront fees. Online debt collection agencies are much less expensive many times costing less than 10 dollars per collection effort. In addition online debt collection allows the business owner to recover more of the debt and control the collection process from the businesses computers. Essentially an online debt collection agency uses professional debt collect letters to begin the collection process. Getting a collection letter from a professional collection agency has a chilling effect on most past due account holders.

If the efforts of an online debt collection agency are not effective then your only recourse is to sue the debtor. In many cases you can file in small claims court and manage the case yourself. However if the debt is substantial you will need the skills of an attorney to effectively sue the debtor. Obviously this is a very expensive option and thus the amount of the debt must be substantial to make the process worthwhile.

Whether you use an online debt collection agency, the courts or do the collections in house the process of collections is expensive and time consuming. Focusing your efforts through an effective process will help reduce the cost and increase the collection of your accounts receivables