When you face financial struggles, you may be unsure of what options exist for you to have a financial restart and to get on with life. Two of the most common options individuals decide between is a debt relief program or bankruptcy. If you live in Columbus, Ohio or the surrounding areas, which should you choose? The Jones Law Firm is here to help you unpack the pros and cons of bankruptcy and debt relief programs.
Debt Relief Options Available in Columbus, Ohio
Debt relief or debt cancellation is the partial or total forgiveness of debt owed by individuals, corporations, or nations. In Columbus, Ohio, the primary debt relief options are debt settlement, consolidation loans, and loan modification.
Debt settlement is a way to reduce your debts with unsecured creditors such as medical bills and credit card debt. The key to these types of debt relief options is that you must pay your creditors some amount of what is owed. Sometimes, a creditor may be willing to settle your debt if you can pay off a lump sum of the total, or if you agree to a payment plan for a lesser amount. They do this, not to benefit you, but rather themselves. If you file for bankruptcy, the creditor may not get anything out of your pocket. Also, creditors will typically only negotiate debt settlements with experienced attorneys. While you may end up paying less, there are a few drawbacks to debt settlement. Debt settlement can negatively impact your credit score for just as long as a bankruptcy. You need to carefully select who you undergo debt-settlement with to avoid a scam. At the end of it all, your creditors may not agree to the settlement.
Debt Consolidation Loans
Debt consolidation loans allow you to combine your debts into one loan to reduce your monthly payments. But in order to do so, remember that you need to take this loan as secured or unsecured which utilizes a fully-owned asset. This comes with risk however because if you cannot meet the monthly payment, you risk your assets.
Loan Modification - Debt Relief
If you have gone forth with a loan, you may be able to come to an agreement with your lender to modify the terms of the loan. Creditors benefit from getting payment without having to seize or sell your property. However, if you cannot repay the loan, even after modification, you still may put your property at risk. Bankruptcy If you are unsure of these debt relief programs, as you may well be, bankruptcy is most likely your best option. While there are many myths associated with bankruptcy, do not be fooled--bankruptcy holds fewer risks than debt relief programs. Take a look at bankruptcy at a glance:
- You don’t have to lose everything in bankruptcy. Under Chapter 7 bankruptcy, there are exemptions that allow you to keep most, if not all, of your assets after filing for bankruptcy. If you cannot file for Chapter 7, you may qualify for Chapter 13 filings, where there is not a liquidation of assets, but rather a proposed payment plan.
- Your credit is not ruined forever. Whether you file for Chapter 7 or 13, your credit will only reflect the bankruptcy for seven to ten years. The more time that passes, the better your credit score will be.
- Your debts are gone. If you file for Chapter 7 bankruptcy, you pay nothing--except an attorney fee--as Chapter 7 discharges most forms of debt.
- You make your plan. Chapter 13 bankruptcy allows you to pay your unsecured creditors only a fraction of what is owed and you come up with your feasible payment plan for three to five years.
When you’re going through a financial hardship, you may feel like there are just too many things to consider. But when you work with a trusted law firm, you can get started on a fresh financial path.
Give Yourself a Second Chance For a Prosperous Financial Future in Columbus, Ohio
If you are experiencing financial distress or the burden of debts you cannot pay, we encourage you to contact The Jones Law Firm for a free consultation about how we can help you decide what is right for you. With our office located in Reynoldsburg, Ohio
, The Jones Law Firm
works with clients in and around Columbus and throughout central Ohio. Don’t delay. Your financial future begins now.