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Ohio House passes bill weakening consumer protection

Life is full of expenses, and it can be all too easy to run into debt. Interest rates on loans and credit cards are often high, and before long, you can find yourself with a seemingly insurmountable problem. Debt settlement companies may appear to be a tempting solution in the face of credit card debt and other such difficulties. However, even these solutions can demand excessive monthly fees that can compound the problem even further. A recent bill passed by Ohio's General Assembly, and awaiting a decision from the Senate, has the potential to affect legislation surrounding the obligations of these settlement companies directly.

The bill concerns aspects of the 10-year-old Ohio Debt Adjusters Act as well as Federal Trade Commission rulings from 2010. This existing legislation governs the level of fees that debt settlement companies can charge and prevents them from demanding payment upfront.

Passage of the bill would result in the exemption of these companies from the limits imposed by the Debt Adjuster Act. As a result, consumers may find themselves drawn into plans that ultimately cost them even more money. Furthermore, the companies are not always able to provide results, as many creditors are not prepared to negotiate with them.

Debt settlement companies often attempt to discourage a consumer from declaring bankruptcy, instead ushering them into financial arrangements from which the companies can take a fee. However, residents of Ohio should not see filing for bankruptcy as something to be avoided. Sometimes it is the best means of overcoming otherwise overwhelming financial challenges. If handled correctly, and with adequate knowledge of the laws involved, there are many ways to overcome debt struggles, negotiate settlements and make a fresh start.

Source: The Blade, "Settling for less," Feb. 14, 2014

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