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Ohio Debt Settlement Laws
Know When Debt Settlement Violates Ohio Law
You expect debt settlement companies to follow the law. But many do not. LHA can help identify when laws have been broken, potentially violating your rights.
Call LHA: 888-726-3181
Ohio Debt Settlement Laws
Multiple Ohio laws apply to debt settlement companies and other debt companies.
What Is The Debt Pooling Companies Act?
Ohio Revised Code 4710 is the Debt Pooling Companies Act. It governs debt settlement in Ohio and defines debt settlement, or “debt adjustment,” as doing business in the following ways:
- Debt adjustment
- Budget counseling
- Debt management
- Debt pooling services
Any company that provides services to debtors or collects money to disburse to creditors is considered a “debt settlement company” and must comply with the Debt Pooling Companies Act.
This applies to companies that engage in debt settlement and debt consolidation. However, it does not apply to debt adjusting incurred in the practice of law, which is why many companies began partnering with law firms. But many times, these law firms do not employ an Ohio licensed attorney, and thus, the Ohio Debt Pooling Companies Act would apply to them regardless.
Suppose you suspect a debt company is doing something illegal or think you’ve been charged excessive fees. In that case, your best option is to work with an experienced lawyer licensed to practice in Ohio. An attorney can review the situation, help determine if any Ohio laws have been violated, and evaluate your genuine relief options.
Not Just Any Debt Attorney
As a founding partner of LHA, Jeremiah E. Heck is a leader in Ohio consumer law. He fights aggressively against companies who violate these laws and the rights of his clients.
Fees Debt Companies Can and Cannot Charge
The Debt Pooling Companies Act does not ban advance fees. However, federal law does. Ohio does limit the fees debt settlement companies can charge. Nearly all debt settlement companies charge more than the statute allows.
According to the Debt Pooling Companies Act, debt settlement companies may not:
- Charge more than $75 from Ohio residents for an initial consultation or initial set up of a debt management plan
- Charge more than $100 per calendar year from an Ohio debtor
- Charge a periodic fee from an Ohio debtor for administering a debt management plan that exceeds 8.5% of the amount paid by the debtor each month for distribution to the creditors or $30, whichever is greater
- If a debt settlement company charges more than these amounts, you may be entitled to recoup what you have paid in violation of the Ohio debt settlement laws.
Compensation for Ohio Debt Settlement Violations
A violation of specific provisions of the Debt Pooling Companies Act is also a violation of the Ohio Consumer Sales Practicing Act. As such, you may be entitled to significant compensation, up to triple your actual damages. Additionally, you can get compensation for the following:
Your actual damages against a debt settlement company may include fees you have paid the company as well as late fees and other costs you’ve incurred due to their advice not to pay your creditors. If a creditor sued you while in a payment plan with the debt settlement company, and you incurred other court costs and attorney fees, you might be able to recover those costs as well.
Federal and state laws specify amounts that you may be able to recover even if you don’t have other damages.
You will likely have to sue the debt settlement company to get the money you deserve. You can recover any attorney fees that you incur throughout the legal process.
Punitive damages are not meant to compensate you. Instead, they work to punish the wrongdoer for willful and intentional illegal actions. If a debt settlement company purposefully charges too much and causes harm to debtors, they may be assessed punitive damages, which you can collect.
You may also be able to seek an injunction prohibiting the company from operating in the same manner in the State of Ohio.
Why Use a Debt Lawyer
Ohio debt settlement laws acknowledge all of the risks of working with traditional debt settlement companies. You can avoid many problems by seeking legal help from a licensed Ohio consumer law attorney.
Pay Legitimate Fees
Working with a licensed debt relief law firm can ensure transparency. At LHA, we offer a 100% free consultation so that you won’t pay excessive fees for a case review. You can learn about your options and future costs before you decide.
Representation if You Are Sued
Many creditors will sue a debtor who becomes seriously past due. If you are working with a debt settlement company, you will not have legal representation in court. By seeking help from a debtor defense attorney from out outset, you will already have someone who understands the law by your side.
Compliance with Ohio Law
Very few of the employees of debt settlement companies are familiar with state and federal laws. The lawyers at LHA know these laws and can use them to your benefit.