If you are an Ohio resident and cannot pay your credit card bills, you can be sued in court. State law 2305.07 permits credit card companies to sue you for up to six years after you originally missed debt payments. To avoid the potential financial problems of credit card-related lawsuits, you can take advantage of various sources of help ranging from credit counseling to personal bankruptcy.
Credit Counseling
Nonprofit organizations such as Advantage Credit Counseling Service work with financially troubled Ohio residents in several capacities. Credit or budget counseling can help people rearrange their financial priorities so they can get out of credit card debt faster while meeting their basic needs. Even if you plan to file bankruptcy, you must get credit counseling beforehand. Some credit counseling services provide educational workshops.
Debt Management Plans
Most credit counseling services in Ohio offer eligible consumers debt management plans. A credit counselor will call all of your credit card companies and try to renegotiate the amount of debt owed, the interest rate assessed and your minimum monthly payment owed. She can also renegotiate debts with other creditors, such as hospitals. Once you agree on a debt management plan, you must stop using your credit cards and cannot get any new ones. You pay one monthly payment to your credit counselor, who distributes it to your lenders as agreed.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a more formalized debt management plan, as local divisions of the United States Bankruptcy Court system are involved in the process. It takes three to five years to partially repay debts under an Ohio Chapter 13 case. Bankruptcy does not cover credit card debts incurred right before filing a case, debts in which a consumer lied to get credit, child support, alimony, court fines, most tax bills and most federally issued student loans, warns the book "How to File for Chapter 7 Bankruptcy."
Chapter 7 Bankruptcy
If you earn less than Ohio's annual median income level, you financially qualify to file Chapter 7 bankruptcy. Chapter 7 eliminates most of your debts, including honestly incurred credit card bills. As of 2011, the annual median income figure for a single Ohio resident was $40,749, while the yearly level for a family of four was $72,625, according to the U.S. Trustee Program. If you have lived in the state for at least two years, you can invoke Ohio asset exemption laws to preserve up to $20,200 of equity in your primary residence and retain other property such as a motor vehicle worth no more than $3,225.
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