Know Your Options and What They Mean for Your Debt Relief

Debt relief is the process of reducing or eliminating debt. This can be done through a variety of methods, including debt settlement, debt consolidation, and bankruptcy. Debt relief can also refer to government programs like income-based repayment or loan forgiveness. Overall, debt relief can help an individual or business get back on its feet and improve its financial situation.

If you are in Ohio and are considering debt relief, there are a few different options available to you. We have outlined them below.

Debt Relief in Ohio: Know Your Options

1. Debt Settlement

If you owe money on unsecured personal debt accounts, you may be able to negotiate a reduction in the balance owed (principal) and the interest. This is known as debt settlement. Most times, you need to work with a debt settlement company and/or an attorney to try to get the creditors to negotiate a settlement with you.

This agreement could be a lump sum payment (of the new, reduced amount), a payment plan (of the new, reduced amount), or even just agreeing to stop making payments on the account altogether.

2. Debt Consolidation

Debt consolidation is another type of debt relief in Ohio. It is the process of combining several loans or debts into one loan. The goal of debt consolidation is to make it easier to repay your debt. This can be done by reducing your interest rate, extending your repayment term, or both. 

Debt consolidation can be a good option for people who are struggling to repay their debt. It can provide them with some relief and make it easier to get back on track financially. However, it is important to remember that debt consolidation is not a magic solution. You still need to make a plan and stick to it in order to get out of debt.

3. Bankruptcy

The purpose of bankruptcy is to provide debt relief for individuals, businesses, and even municipalities. In Ohio, there are six types of bankruptcy: Chapter 7, Chapter 11, Chapter 12, Chapter 13, Chapter 15, and Chapter 20. 

The most common type of bankruptcy is Chapter 7. This type of bankruptcy liquidates your assets to pay off your debts. If you have a lot of assets or if you owe a lot of money, then you may not be able to file for Chapter 7 bankruptcy.  To qualify for Chapter 7 bankruptcy, you must pass a means test that looks at your income and expenses.

Chapter 11 bankruptcy is designed for businesses. This type of bankruptcy allows businesses to restructure their debts and continue operating. 

Chapter 12 and Chapter 13 bankruptcies are designed for individuals with regular income. These types of bankruptcies allow individuals to keep their property and repay their debts over time.

4. Credit Counseling

Credit counseling is a form of debt relief that can help you get your finances under control. When you work with a credit counselor, they will help you create a plan to get rid of your debt and improve your credit score. Credit counseling is available in Ohio, and there are many qualified counselors who can help you get started.

If you are struggling with debt, credit counseling may be the right option for you. Counselors can help you create a plan to get rid of your debt and improve your credit score. They can also provide advice and support throughout the process. Credit counseling agencies can help you create a budget and provide advice on how to reduce your spending. They sometimes will also help you negotiate with your creditors to reduce your interest rates or waive late fees.

5. Refinancing

When you refinance, you take out a new loan to pay off your old ones. This new loan typically has a lower interest rate, which can save you money in the long run.

There are several things to keep in mind when refinancing, though. First, make sure the interest rate is lower than your current one. Second, be aware of closing costs and other fees associated with the new loan. Finally, make sure you can afford the monthly payments.

6. Forbearance

Debtors in need of debt relief may find forbearance to be a viable option. Forbearance is another type of debt relief that is available in Ohio. This program allows borrowers to postpone payments on their loans for a period of time. There are certain conditions that must be met in order to qualify for forbearance. The most common requirement is that the borrower demonstrates financial hardship. In addition, the loan is often required to be in good standing; the borrower should ideally be current on all other payments. 

Forbearance can provide some much-needed breathing room for borrowers who are struggling to make ends meet for the time being. It can help them get back on track financially so that they can eventually resume making regular payments on their loans.

Choosing the Debt Relief Option That is Right for You

Before you decide on a specific debt relief option, it is important to understand the pros and cons of each approach. For example, if you decide to file for bankruptcy, you may be able to get rid of your debts quickly, but there are also some significant drawbacks, including the fact that bankruptcy can stay on your credit report for up to 10 years.

Another option is debt settlement, which involves negotiating with your creditors to agree on a reduced payment amount. However, creditors will hardly ever negotiate with individuals, and will most of the time, only do so in the presence of an attorney.

Even with the many options available for those struggling with debt, it is important to know what each option entails and how it will affect your finances. We thus recommend taking some time to discuss your options with an Ohio debt relief attorney and make a plan that will help you get started on your debt relief journey.

At Timonere Law we offer free consultations that can help you understand your options and choose the right one for you. You may contact us by calling (440) 576-8406, or by filling out this online form.