Debt Relief Options in Ohio

Where do you go for help when you're in debt and live in Ohio? In this article, you will read about your debt relief options and learn some of the rules and regulations that apply in Ohio.

Choose Your Debt Amount

Debt Statistics in Ohio







Debt Relief Programs in Ohio

Several options exist to provide relief for those burdened by debt in Ohio. Credit counseling agencies (nonprofit and for-profit), banks, credit unions, online lenders and debt settlement companies work with consumers to pay off credit card debt.

All offer different approaches. The five debt-relief programs include debt management programs, debt consolidation loans, debt settlement, nonprofit debt settlement and bankruptcy.

Each program has plusses and minuses for Ohioans to ponder.

Here is an outline for each program and why it might work for you:

Debt Management

Debt management programs work with card companies to reduce the interest rate on credit card debt to somewhere around 8%. The average interest rate on credit cards is 16.7% in 2022, but if you miss a payment, the rate can jump to 20%-25%. Miss two payments and the rate can go to 25%-30%.

So, if you owe $5,000 on credit cards and reduce their interest rate from 25% to 8%, the interest on your monthly payment drops from $105 to $33 per month, which provides $72 each month to pay your debt off faster. Counselors at nonprofit credit counseling agencies factor your income and expenses and calculate an affordable monthly payment to eliminate your credit card debt.

Other pluses for Ohio consumers: Your credit score is not a factor for enrolling. You can be debt-free in 3-5 years if you make on-time monthly payments, and you may even pay the debt off early. If you don’t like the program, you can quit, though that means the credit card company will take back the interest rate concession and you’re back to paying 20%-30%.

» Where to find it? – Debt management plans are offered by nonprofit credit counseling agencies, who work with creditors to reduce interest rates to a manageable level. The program covers unsecured debts, like credit cards, but not secured debts, like houses or cars.

» Is it right for you? – Anyone in Ohio with high-interest credit card debt would be helped by this program. It lowers interest rates and it chips away at the amount owed until, in 3-5 years, you are free from the debt.

Debt Consolidation Loan

debt consolidation loan is one loan used to pay off all debt for multiple credit cards. You make one monthly payment to the bank/credit union instead of three, four or five credit card payments. The interest rate on a debt consolidation loan depends on your credit score and whether you are willing to put up collateral, like your home or car, to back the loan.

Typically, people put up collateral and pay around 10%-12% for a debt consolidation loan, compared to the 25% interest rate they could be paying to credit card companies. This is a single payment to a single entity, at a lower interest rate that saves money and simplifies payments. It’s a big savings, which makes this look like a really good deal. And it can be.

However, any Ohioan who took out a big loan to pay off a bunch of small loans still owes the same amount. If you don’t stop using your credit cards, you must pay the consolidation loan, plus whatever you’re buying with credit cards.

And that’s if you qualify for the loan; a poor credit score could eliminate you.

» Where to find it? – Banks, credit unions and online lenders offer debt consolidation loans. It’s worth your time to shop around for the lowest interest rate and repayment terms.

» Is it right for you? – It’s a wise option for anyone with a good credit score (670 or higher) and the discipline to stop using credit cards. Generally, consolidation loans offer a lower interest rate than the onerous and burdensome rates charged by credit card companies.

Debt Settlement

Debt settlement allows a consumer to pay off a debt for less than what is owed. The payment usually is made in a lump-sum and comes after 2-3 years of saving money in an escrow account and negotiating with one or more creditors so that they agree to the plan. As good as this sounds, it can be a long process, and it damages your credit report for seven years. Also, the IRS considers forgiven debt of more than $600 as income that must be declared on your tax return.

The approach for Ohioans works this way: You or a company you hire a company to negotiate a payment amount agreeable to both parties. You stop sending even minimum payments to the card companies, which means late fee penalties and interest are added to what’s owed. Instead, you pay into an escrow account. When that account gets big enough, the company doing the negotiating negotiates an agreement with the creditors. Be aware: Card companies do not like this form of debt relief and some refuse to deal with debt settlement companies.

While debt settlement companies like to brag that they can cut your credit card debt in half, that doesn’t account for their fees and late payment penalties and interest on their accounts.

The benefit to the credit card company is that it receives some money, as opposed to little or nothing if you default.

» Where to find it? – For-profit debt settlement companies specialize in this service. They negotiate on your behalf with the credit card companies, who must agree to the plan before it goes forward. The process usually takes 2-3 years and card companies are under no obligation to accept settlement offers.

» Is it right for you? – Anyone in Ohio with large amounts of debt who is desperate for a solution so they don’t have to declare bankruptcy, should look at this option. If you have $50,000 in credit card debt – two million American consumers do – getting it knocked down to $25,000 sounds pretty good.

Nonprofit Debt Settlement

Nonprofit debt settlement was created in 2021 by nonprofit credit counseling agencies and the lure is the same as traditional debt settlement – the consumer will pay only 50%-60% of what they owe. How that happens is completely different from for-profit debt settlement companies.

Instead of long negotiations, the lenders agree to the terms upfront. Rules that must be followed include:

  • The consumer hasn’t made a credit card payment in 180 days;
  • The consumer must make fixed payments for 36 months – you can pay off early, but there are no extensions
  • All payments must be made on time or the program is canceled.

The benefit to the Ohio consumer is that there is 0% interest charged during the 36-month repayment time.

» Where to find it? – The program started in 2021, so only a few nonprofit credit counseling agencies offer it and only a few credit card companies and banks participate. Nonprofit credit counseling agencies are certified and accredited by the National Foundation for Credit Counseling. Federal law requires the agency act in the client’s best interest. Search online for “nonprofit debt settlement” to find an agency that will provide this program.

» Is it right for you? – This is for Ohioans who face overwhelming credit card bills but lack the income to pay them off. You won’t have to pay any interest on the debt, as long as you keep up with the 36 monthly payments it takes to get through the program.


Bankruptcy is painful, but for some it might be the best solution available. It gives you a second chance to get your finances in order, and it can be done without losing many of your possessions, including your home.

There are two major types of bankruptcy, Chapter 7 and Chapter 13. In Chapter                                      7 bankruptcy, non-exempt assets are sold by a trustee appointed by the court and the money is used to pay off debts. Key assets are exempt from this process, notably your home, car, personal items needed for work, pensions and Social Security.

In Chapter 13 bankruptcy, you keep your assets in exchange for making regular payments to the trustee to pay down debt.

The consequences for bankruptcy are significant. Your credit score may drop 100-200 points. Also, bankruptcy stays on your credit report for 7-10 years, making it more difficult to get credit for a home or car loan in the future.

» Where to find it? – An Ohio bankruptcy attorney is a must to get through this process successfully. He or she knows the ins and outs of the system and can protect you and your family as much as possible in the process.

» Is it right for you? – Look at your income and expenses. If you can’t figure how to pay your debts in five years, bankruptcy might be the best debt-relief option available.  It’s always best to try nonprofit counseling, settlement or consolidation before bankruptcy, but if those are not for you, bankruptcy is the final resort.

Statute of Limitations in Ohio

The state of Ohio is not as consumer friendly as some states when it comes to time limits. Ohio’s statute of limitations is six years no matter the type of debt. And the six years is counted from the date a debt became overdue or when you last made a payment, whichever was more recent. If the timeframe is more than six years, a creditor cannot sue to collect the debt.

Debt Collection Laws in Ohio

The Ohio Attorney General’s site lists two key laws: The Federal Fair Debt Collection Practices Act and the Ohio Consumer Sales Practices Act. These laws protect consumers from abusive, deceptive and unfair debt collection practices. The law requires lenders and collectors to treat Ohioans fairly and prohibits certain methods of debt collection, but they do not erase any legitimate debt that is owed. The state italicizes “they do not erase” for emphasis.

More Debt statistics in Ohio

One right that Ohio gives consumers is this: Debt collectors must send you a letter within five days of contacting you to specifically state the amount owed, the creditor it Is owed to and your rights to dispute and request verification of the debt. In theory, this ensures the legitimacy of the debt in question.

  • Unemployment: The unemployment rate in the state dropped from 5.1% in July of 2021 to 4.5% by the end of the year.
  • Bankruptcy: In Ohio, 20,818 individuals filed for bankruptcy in 2021. That number is considerably lower than the previous five years. The average of those years was 37,673. The 2021 number is a drop of 44.7%.
  • Credit card debt: Ohio is below average in credit card debt per household. In 2021, that number was at $4,888. The national average: $5,525.
  • Payday loans: Ohio sets limits on interest and fees for payday loans and fees, though the limits are not exactly low. Interest rate may not exceed 28% per year, and a monthly maintenance fee cannot exceed 10% of the loan amount or $30, whichever is lower.
  • Income: According to the census, Ohio ranked 33rd in the nation in median income: $56,602. Ohio’s median actually increased by 1% in the third quarter of 2021, but that followed significant drops caused by the pandemic. The top 1% of earners in Ohio average $460,129 per year.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


  1. Ohio Attorney General (ND) Frequently Asked Questions on Debt Collection. Retrieved from
  2. Latimer, J. (2021, December 22) Ohio Student Loans: Debt Stats, Repayment Programs and Refinancing Loans. Retrieved from
  3. Horymski, C. (2022, February 22) What Is the Average Credit Score in the U.S.? Retrieved from
  4. Bureau of Labor Statistics (ND) Statistics. Retrieved from
  5. National Conference of State Legislatures (2020, November 11) Payday Lending State Statutes. Retrieved from