If you’re overwhelmed by debt but don’t want to file bankruptcy, there are alternatives you may be able to take. The vast majority of debtors would prefer to repay what they owe, and there are ways to settle debt without going to court.
The experienced and compassionate Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer offer a free consultation to examine your specific circumstances and come up with a plan that is the best course of action for you. Our team of attorneys are well-prepared to negotiate settlements regarding situations such as:
Here are some options to reduce your debts without filing bankruptcy.
1) Work Out a Payment Plan for Debt Settlement
Most creditors would rather accept a reduced payment than no payment at all. If you work out a settlement, you may receive a reduced payment, lower interest rate, removal of late fees or penalties, or other benefits to help you to keep your home, vehicle, or property, and bring the loan back to or keep it in good standing.
For unsecured debts, such as medical bills and credit card bills, creditors may be willing to enter into a debt settlement if the debtor can pay a lump sum amount (typically 40% to 60% of the total debt) within a short time period. The new repayment plan should fit within your budget and should reduce the overall amount owed to the creditor. In turn, the creditor should agree not to pursue the remaining outstanding debt.
Debt settlements should be made in writing and signed by an authorized representative of the creditor before any payment is made to the creditor. This prevents additional attempts to collect the remaining balance of the unsecured debt. Be aware that some creditors will negotiate debt settlements only with experienced attorneys.
2) Consider a Debt Consolidation Loan
With a Debt Consolidation Loan, you can combine multiple debts into one loan you agree to pay over a set period. It’s simpler to repay debt when you have to make only one payment. Also, you can often reduce the monthly payment amount by moving higher interest rate accounts to the consolidation loan. You benefit from getting rid of exorbitant credit card interest rates, as well as other debts on which you may be making only minimum payments, and you may have more time to pay back what you owe.
Consolidation loans may be taken as unsecured, or they may be secured utilizing a fully owned property such as a vehicle, or added as an additional mortgage against a home. A home equity line of credit may be at a lower rate of interest and is potentially a tax-deductible loan. However, if you default on the equity line, the lender can put you into foreclosure.
You may sometimes be able to consolidate debt by transferring debt to a zero or low percent balance transfer credit card. Some bank card companies offer new customers with decent credit transfer rates credit cards with APR as low as 0% for 12 to 18 months.
3) Consider Debt Counseling
Ohio allows the option of a credit counseling plan. Your creditors may be willing to lower your interest rates and accept reduced payments if you enter a plan where you deposit money each month with a credit counseling service. (For approved agencies, see this page.)
For a charge, the service divides the money you deposit among your creditors according to a regular, timely payment schedule developed by the counselor. The plan could take 48 months or longer to complete. Some credit counseling services charge little or nothing for managing the plan; others charge a monthly fee that could add up significantly. Some credit counseling services are funded, in part, by contributions from creditors.
As part of the repayment plan, you may have to agree not to apply for, or use, any additional credit while you’re participating in the program. Also, in case you miss a payment, any creditor can terminate this program.
Get Expert Help
Although these alternatives to bankruptcy may help, sometimes bankruptcy is still your best option to address your unmanageable debt head-on, as it provides protection from creditor harassment, wage garnishment and lawsuits. Because the situation is complicated, it pays to get help and advice from an experienced Ohio debt-relief attorney. At Fesenmyer Cousino Weinzimmer we offer a free initial consultation to help you discover and implement bankruptcy alternatives that may work in your case.
Fesenmyer Cousino Weinzimmer serves central and southwestern Ohio from offices in Columbus, Dayton and Cincinnati. Call 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati), or send an email inquiry to request your free consultation.
Does bankruptcy disqualify you for a job? If you’re overwhelmed by debt and are considering the proactive step of filing for bankruptcy so you can get a fresh start, you may have several questions. One…
In the midst of all the chaos and uncertainty surrounding the coronavirus pandemic, some consumers are looking for ways to tighten their belts and prioritize finances. For other consumers who were already behind on their…
If you’ve fallen behind financially and are having trouble paying your bills, you may be wondering what is the statute of limitations for collecting a debt in Ohio? Unfortunately, it is six years for most…