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Cincinnati Bankruptcy Law Blog

Bankruptcy: admitting that debt is an issue and seeking help

Dealing with a substantial amount of debt over extended periods can be stressful and emotionally draining. In some cases, a person may take on debt loads without giving much thought to what it could lead to, only to have a change in circumstances leave him or her facing significant financial hardships. When faced with similar struggles, individuals in Ohio may find it in their best interests to form a plan to deal with debts, and know when it is necessary to seek relief through outlets such as bankruptcy.

Debt is a part of the everyday life of many individuals. It can come in the form of a home or auto loan, or even stem from purchases charged to a credit card account or from a medical emergency. Recent studies suggest that the average amount of debt in each household is just over $137,000, with credit card debts alone reaching above $15,000. These studies also suggest that the first step to overcoming debt is to acknowledge it as an issue.

Bankruptcy may be the healthiest financial option available

There are numerous scenarios in which an individual in Ohio or elsewhere may begin to experience financial struggles. There may also be a multitude of avenues with which a person can seek relief from debts, each of which may offer its own potential advantages and disadvantages. However, certain outlets for relief might not be as good as they seem, and bankruptcy could prove a better path with which to pursue financial freedom.

Upon exploring relief from debts, settlement offers may appear exceedingly enticing, especially at first glance. However, these arrangements could have certain disadvantages that may be easily overlooked, such as those pertaining to taxes assessed on any amounts that are forgiven in the process. The amount agreed upon in a settlement offer could also be deceiving, as this process could take numerous years to finalize, and interest rates and fees could leave a person paying nearly the full amount of original debt owed.

How can I get my credit situation under control?

The causes and reasons for credit card debt troubles are many and varied, but the symptoms are always the same -- not having enough money to pay your credit card in full each month. If you combine this kind of situation with a family emergency that requires a large expenditure of cash, you can see how things can quickly get out of control.

No matter how you got there, if you can't get out of credit card debt, this article offers advice for solving your debt problem.

Bankruptcy: Post-holiday debt could lead to financial struggles

Many individuals in Ohio and elsewhere may have chosen to celebrate the holidays by providing each of their loved ones with a multitude of gifts. While at the time a similar decision may have been fulfilling, when the bills begin to arrive, some may find themselves facing a substantial amount of debt. While in some cases, similar financial troubles may only be temporary, should they persist, an individual may find it advisable to seek guidance on the available outlets for debt relief, such as bankruptcy.

According to reports, the average amount of debt taken on by each individual over the recent holiday season was just above $1,000. While some may have chosen to pay for their gifts up front, others might not have possessed the necessary savings to do so. This likely led many to turn to credit cards, and nearly half of those surveyed suggested they wouldn't be able to pay off their holiday debt for several months.

Bankruptcy and the impact debt can have on one's credit score

Constantly dealing with overwhelming amounts of debt could have a substantial impact on a person's quality of life. Many individuals in Ohio who experience prolonged periods of financial hardship may wish to pursue relief through bankruptcy, but they may have concerns about the impact it will have on their credit score. While filing for bankruptcy will inherently affect this area of life, it may still be the healthiest financial choice available.

Filing for bankruptcy is a major financial decision that requires a great deal of thought. A bankruptcy will remain on a person's credit report for as many as 10 years depending on the chapter that is filed. While a similar decision may have an impact on one's credit score, those who are struggling to keep up with monetary obligations may already be experiencing a similar outcome or worse.

Bankruptcy: Medical debts and their impact on retirement

Many individuals in Ohio and across the country place a high priority on having a plan in place for the future. After spending years saving and planning for retirement, an individual might not want anything to disrupt his or her current strategy. Unfortunately, one medical emergency might be all it takes to leave one facing a seemingly insurmountable amount of debt, potentially prompting a need to seek assistance through the available outlets for relief, such as bankruptcy.

While there are numerous scenarios in which one might experience the burdens of debt, medical bills are one of the most prevalent concerns for those of a certain age. With the extensive costs of medical treatment, an emergency could leave a person facing a substantial financial hardships. Since a similar situation can happen at any moment, it can be difficult to plan for, and for those living on a fixed budget, the outcome could prove devastating.

Bankruptcy: The potential price of using a credit card

Many individuals in Ohio and elsewhere have turned to credit cards for aid during times of substantial financial trouble. Although a similar decision could provide a momentary respite from monetary woes, the end result could unfortunately be much worse. Instead of looking for a temporary fix to these issues, an individual might find it beneficial to pursue a more long-term solution, such as filing for bankruptcy.

Credit cards may be easy to obtain and convenient to use, but with high interests rates, they may also pose a threat to a person's financial security. However, many continue to use these lines of credit for a variety of reasons. Whether to fund a once in a lifetime occasion or simply to keep up with monthly expenses, credit cards can offer immediate assistance with financial difficulties, but with high interests rates, this type of aid may come at a price.

What happens when someone stops paying a debt?

You won't go to jail for not paying your debts on time, but this wasn't true in the not-too-distant past. From the late 17th century to the early 19th century, states and cities in the United States operated debtors' prisons. These were facilities created to house people who failed to pay their debts. In some cases, the debts they owed were very small.

These days, the story is quite different. The United States federal government has banned debtors' prisons since 1833. So, what will happen if you fail to pay your debts in the modern era?

Bankruptcy: Seeking advice in choosing a path for relief

Many individuals in Ohio and elsewhere have faced financial challenges at some point in life. In some cases, these troubles may only be temporary. In others, they could persist for prolonged periods and prompt a need for relief through bankruptcy. However, the process can be complex, and those facing similar circumstances could benefit from seeking guidance in choosing the correct path with which to proceed.

In consumer bankruptcy, there are two main options available, which are Chapter 7 and Chapter 13. In Chapter 7, many or most of one's unsecured debts may be discharged upon finalizing the process. However, this type of bankruptcy may also call for the liquidation of certain assets. A person's income may also play a role, as those who make more than the median income in Ohio may have to pass the means test in order to be eligible for relief through Chapter 7 bankruptcy.

Bankruptcy: When economic growth leads to heavier debt loads

Many individuals in Ohio and elsewhere have experienced the burdens of debt at some point in life. Debt can come in numerous forms, each of which can have a substantial impact on a person's life. Regardless of how it occurs, those who experience similar hardships may find it beneficial to gain an understanding of the available outlets for relief, such as bankruptcy.

A person can experience similar financial issues under a variety of scenarios. A sudden loss of income or medical expense, or even a revolving balance on a credit card can leave an individual struggling to keep up with monetary obligations. Studies suggest that consumer debts continue to rise as individuals take on heavier debt loads despite the fact that job-related pay raises have seen little to no increase in recent years.

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