Mortgage Relief Act 2010: The Real Score About Debt Relief Grants From the Government

August 18th, 2011 | Posted in Debt Relief

In preparation for the 2010 tax season, here’s some clarification on first time home buyers credit qualifications, the Mortgage Relief Act 2010 extension and you. The Worker, Homeownership and Business Assistance Act not only extends the tax credit for first time home buyers, but it also expands who is included as a “first time home buyer”.

But is this Relief Act just another program from the government meant to give people false hopes? Or is it the best solution ever formulated to counter the rising debt incurred by many Americans? The truth is that it is supposed to take effect on February 22, 2010. This act is basically designed to address the growing debt crisis in the United States and its approach includes not only credit cards, but housing loans and mortgages as well. It is more than just a debt elimination grant from the government; the Debt Act mandates that creditors and other finance-lending agencies are not to charge their clients with penalty fees unless is they ask for an over-limit fee. Banks are also instructed not to include late fees in their clients’ statements if the banks are late in crediting payments.

You must remember that the insolvency calculation is done immediately before the cancellation of debt. This can be difficult because in many cases the cancellation of debt occurred many months prior.

There are also other options available for people who are in debt and who do not qualify for a government debt relief. People who are in deep credit card debt can avail of debt settlement instead. Debt settlement programs are mostly offered by private settlement agencies and are designed to eliminate debt as much as to 70%.

Finally, what is qualified principal residence indebtedness’ impact on tax liability? Well, first of all, if this indebtedness has been cancelled, it too may be excluded from income. Which will reduce your taxable income and thus, potentially, your tax liability. Qualified principal residence indebtedness includes: Debt incurred in acquiring, constructing or substantially improving your principal residence. Debt secured by your principal residence as a result of refinancing. One point to be noted, cancellation of debt in a Title 11 bankruptcy case does not qualify for this exclusion.

Learn more about Obama Mortgage Relief Plan Qualifications.