While the U.S. economy appears to be doing nicely, an increasing number of Americans are still struggling to pay their bills. Take credit card debt, for example. According to the latest study from WalletHub, Americans are piling on credit card debt at levels that rival the end of 2008, in the heart of the recent financial crisis. Outstanding credit card debt has recently reached $927.1 billion, and the average household with debt now owes $7,941 to credit card companies.
In addition to credit card debt, millions of people are struggling with debts that include debts for mortgage, medical, and student loans. And despite the positive figures for the U.S. in general, the Ohio economy continues to struggle as it tries to adapt to a loss of manufacturing jobs and a migration of workers out of the state. In fact, Ohio ranks 12th among states for per capita bankruptcy filings.
The skilled and seasoned Ohio debt relief attorneys at Fesenmyer Cousino Weinzimmer understand that financial problems can happen to even the most well-intentioned people. We offer a free consultation to examine your sources of debt and determine what you can do to get out of debt and get started on the road to financial recovery.
Areas of Personal Debt
Here are the most common sources of debt in Ohio:
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Student Loan Debt
The average Ohio student loan debt stood at $29,353 in 2014, according to the Student Debt report prepared by The Institute for College Access & Success. This was an increase of 53% during the decade beginning in 2004.
People tend to think of student loan debt as a problem for young people who are recent graduates, but it has become a problem for older adults as well. In fact, older Americans are the fastest-growing group of student loan borrowers, often taking on debt to help finance college for themselves or for their children and grandchildren.
According to a new report by the Consumer Financial Protection Bureau (CFPB), many older adults are living on fixed incomes and carry other debts into retirement, including mortgage, credit card, and auto debt. Among federal loan borrowers 65 and older, nearly 40 percent were in default and at risk of having a portion of their Social Security benefits and other assets taken to repay their student loans.
If you are at risk of default on student loans, there are steps you can take to help, including:
- Seek an income-based repayment plan that can make the loan more affordable or even suspend payments if your income has decreased.
- Understand your rights and responsibilities if you co-sign a loan and the primary borrower can’t make the payments. Request information about the loan to see whether the borrower is keeping up payments before it affects your credit.
- Protect your Social Security. The federal government has the right to collect on loans it guarantees by taking a portion of your Social Security. You may be able to get the payment reduced or waived if you have a disability. (See Department of Education’s Federal Student Aid website.)
- File a complaint.If you have problems with your student loan lender or servicer, you can submit a complaint to the CFPB.
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Medical Debt
Medical debt is the most common cause of people filing for bankruptcy in Ohio. Even for those with insurance, a major medical problem can cause bills to mount up to the point where you can no longer meet them. And since people often take on additional credit card debt to cover medical bills, debt increases rapidly.
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Credit Card Debt
Transunion, a large personal credit rating agency, reported the second quarter of 2016 average consumer card balance in the Ohio was $4,933 compared to the nationwide average of $5,247. The 2015 average credit score of 631 shows a significant downturn, and this is due to factors such as irresponsible bill-paying, missing payments, or making late payments. Carrying balances each month on multiple credit cards or paying just the minimum amount due results in high-interest rates as well.
To get out of credit card debt, the best strategy is to pay the full balance each month, or at least as much more than the minimum payment as possible.
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Mortgage Debt
According to a survey by GOBankingRates.com, the top source of debt for people in Ohio is mortgage debt, and residents of 41 other states also reported that mortgages are the biggest source of debt.
While Ohio homeowners had an average of $125,359 in mortgage debt at the end of the first half of 2016, this was less than the national average of $192,749. However, the Ohio mortgage loan balance increased 0.8 percent from the same time in 2015.
What to do About Debt
If you have found yourself in a situation where debt is more than you can handle, there is help available to get you past this crisis and provide the fresh start you need. Bankruptcy is a legal way to have many debts forgiven. The most common types are Chapter 7 and Chapter 13.
While many kinds of debts are discharged through bankruptcy, be aware that unless it would be an undue hardship for you to repay them, you would still be responsible for student loans.
Contact Us and Get Help
If you find yourself drowning in any kind of debt, take the first step toward debt relief and contact us today for a free initial consultation.
During your consultation at Fesenmyer Cousino Weinzimmer, we will evaluate your entire financial situation and determine the best fit for your particular circumstances. We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case. We know the courts and the system and will walk you through the process every step of the way.
Delaying can only worsen your situation, so call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today. Call one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) or email for your free consultation so we can determine what debt relief solutions will work best for you.
