Mason, Ohio, Bankruptcy Law Blog

The May 1 deadline for high school seniors to make a decision about which college they will attend is quickly approaching. However, with the current state of the economy, many consumers are experiencing financial trouble, looking for debt relief and, in some cases, even considering bankruptcy as an option. However, as residents of Mason make these decisions, the financial aid letters they are receiving from colleges do not make the process any easier.

When choosing a college, comparing the costs of different universities is an important part of the process. However, difficulties can arise when college-bound students and their parents receive their financial aid letters.

Some Ohio consumers may fear that filing for personal bankruptcy is inevitable. They are dealing with high credit card bills and creditor harassment. Sometimes bankruptcy can seem like the only form of debt relief available. Potential new legislation in Ohio could provide some additional relief to consumers by shortening the amount of time a debt collector can pursue a debt.

An earlier post in this blog warned consumers about paying on time-barred debts because it could reset the clock for the amount of time a collector has to make an attempt at recovering an unpaid debt. In Ohio, the time that collectors are allowed to recover on unpaid debts is extensive.

Currently, Ohio is one of only two remaining states that give collectors up to15 years on certain debts to pursue money from consumers who have not paid their debts before they become time-barred. However, the passage of new legislation could decrease this 15-year term to six years in Ohio.

Many people in Mason and beyond continue to struggle with mounting debt. Some people may feel their debt is out of control. Although some might find negotiating with a lender to be the best option, they may find themselves forced to pay up later on.

Consumers whose credit card debt was forgiven by a lender may be faced with a large tax bill. Surprising to many, the Internal Revenue Service considers debt forgiveness a form of income, therefore making the forgiven debt taxable.

Ohio residents with medical bills, even those that are paid off, may want to check their credit score. Many people with medical expenses turned over to a collection agency are seeing the severe impact on their credit score.

Families that paid their medical bills in full years ago may still see those bills preventing them from moving forward with big life events. After medical bills are paid off, records of collection actions can stay on credit reports for up to seven years. If this is not frustrating enough for consumers, some of the bills sent to collection agencies are as low as $6 and most are below $250.