Debt Reduction Help in Ohio

If you live in Ohio and cannot pay your consumer-oriented debts as promised, you potentially qualify for several types of debt reduction help. The federal government, nonprofit credit counseling agencies and your lenders are all potential resources for assistance if you get in serious financial trouble. Also, even if you must take a drastic step like filing for bankruptcy you can usually retain at least some of your assets under Ohio exemption laws.

Debt Management Programs

Ohio debt management programs, usually run through nonprofit divisions of Consumer Credit Counseling Services, allow eligible debtors to partially repay some of their bills. A certified credit counselor renegotiates your debts and the repayment terms with your creditors. You pay one monthly lump sum, including an administrative fee, directly to your selected credit counseling agency. But the fact that you reduced your debt repayment terms will negatively impact your credit rating for seven years.

Lender Hardship Programs

With diligence and a solid repayment plan, you can try to renegotiate your debt terms with your lenders, according to Bankrate. But this does not always work. You should have a good repayment history, steady income and a compelling reason for the financial problems you encountered. If you cannot successfully renegotiate your debt terms and would rather not use an Ohio credit counseling service, you may need to file bankruptcy.

Chapter 7 Bankruptcy

If you earn less than Ohio's annual median income level, you qualify for full relief of pre-existing consumer debts, according to the book "How to File for Chapter 7 Bankruptcy." As of 2011, the annual median income level for a single Ohio resident was $41,724, while the figure for a couple was $52,030, according to the U.S. Trustee Program. The figure for a family of three was $61,552 a year, while families of four could earn up to $73,040 annually.

Chapter 13 Bankruptcy

If you have steady income, you can partially repay your creditors under Chapter 13 bankruptcy. It usually takes three to five years to finish a Chapter 13 plan in Ohio. If you have lived in the state for at least two years, you can keep at least some of your assets in any type of personal bankruptcy under Ohio asset exemption laws. As of 2011, you could retain $20,200 of homestead equity, $400 of cash, $1,500 in household goods and $1,500 of jewelry, according to Bankruptcy Action. You can also keep up to $3,225 in motor vehicle equity and $2,025 in work-related tools regardless of your bankruptcy status.