Ohio Debt Relief Programs

Many individuals and families across Ohio are struggling with crushing debt and are desperate to find ways to alleviate that burden. Over the years, many organizations and companies have been established to provide debt relief services. These include debt settlement companies, credit counselors, or debt management plan providers that are either for-profit or non-profit entities. However, consumers need to be aware that federal and Ohio law provides some consumer protections for those seeking debt relief services.

If you are considering using a debt settlement company or credit counselor, you may want to speak with experienced Ohio debt lawyer Jeremey Heck, who can help you protect your rights and advise you on your options.

Federal Law on Debt Relief Fee Collections

The Federal Trade Commission (FTC) has a rule in place that prohibits companies that sell debt relief services over the phone from charging fees prior to reducing or settling the debt. The FTC’s Telemarketing Sales Rule covers credit counseling, debt settlement, and debt negotiation services. The rule also requires these companies to make mandatory written disclosures, including an explanation of fees and conditions on services, the amount of time it will take for results to occur, what percentage of each outstanding debt must be saved prior to making an offer to creditors, and what happens if a debtor stops paying creditors. The entity must also provide you with the right to cancel your debt settlement agreement with the company within seven days. However, the Telemarketing Sales Rule does not apply to debt settlement agreements that are not executed over the phone (e.g. in-person or over the internet) and does not apply to non-profit debt relief entities. Additionally, it does not cover secured obligations like car loans, mortgages, and liens.

Ohio Debt Adjusters Act

The Ohio legislature enacted the Debt Adjusters Act to provide additional protections for consumers using debt relief services in the state. The law covers any entity, regardless of whether they are for-profit or non-profit, that engages in debt relief services by adjusting or discharging a balance owed on a debt, or taking funds from debtors and using it to pay creditors on their behalf. This state law requires covered entities to maintain all funds received and disbursed on behalf of a debtor in a separate trust account and make disbursements to creditors within 30 days of receiving such funds. The law also requires companies to have a policy of waiving fees if a debtor cannot afford them, and to maintain insurance policies worth at least $100,000. Finally, the law requires debt relief entities to undergo an annual audit of their transactions and provide such audits to the state Attorney General.

The Debt Adjusters Act requires fees charged by debt relief entities to be reasonable. The initial consultation or debt plan starting fee must not exceed $75. Any continuing consultation fees or contributions must not be more than $100 per year. If the entity charges fees based on monthly payments made to creditors, it must be no more than 8.5 percent of the amount or $30, whichever is greater.

Experienced Ohio Debt Attorneys for Debt Relief Counsel

If you feel that there is a mounting burden of debt threatening your well-being and the stability of your family, you may be thinking about using one of the debt relief services offered by dozens of Ohio companies. However, before doing so, you’ll want to talk to a knowledgeable and experienced Ohio debt attorney who can explain your rights under federal and Ohio law against unfair and deceptive debt relief practices.

At Luftman, Heck & Associates, our consumer law attorneys may be able to advise you on your best course of action. Additionally, if you believe your rights have been violated by a debt relief company, you may be entitled to have your debt adjustment agreement canceled and recover damages and costs.

Call the experienced Ohio debt lawyers at Luftman, Heck & Associates at (888) 726-3181 or email us at advice@ohiodebthelp.com for a free, initial consultation.