Very few Ohio residents view bankruptcy as a chance to walk away from debts that they had no intention of ever repaying. On the contrary, most people who file for Chapter 7 bankruptcy have made every conceivable effort to repay their financial obligations before considering a different option. In some cases, the institution that issued an individual’s loan will simply not work with the borrower to reach a repayment agreement that is tenable.
For example, when a consumer falls behind on loan payments, the bank will often begin aggressive collections efforts. This can come in the form of threatening letters or aggressive phone calls. When the borrower tries to suggest repayment terms that would work for their current financial scenario, the bank is often uninterested in working on a solution. Instead, the threats of a lawsuit continue, leaving the borrower with little option for making good on the debt.
If the borrower is sued and cannot disprove the validity of the debt, the situation can escalate. A judgment may be awarded in favor of the lender. From that point forward, the borrower’s wages can be garnished, leaving him or her with even fewer resources to cover expenses and debt service. The situation can often enter into a downward spiral, the end result of which is personal bankruptcy.
Many Ohio residents prefer to take a more proactive approach to their debt scenario. If lenders are unwilling to work out a payment plan that is reasonable, it is time to consider Chapter 7 bankruptcy. This is never an individual’s first choice in dealing with debt, but it is often the most effective means of eliminating high levels of debt and regaining a measure of stability.
Source: The Huffington Post, “My Bank Won’t Work With Me So I Can Pay My Debt“, Steve Rhode, Jan. 13, 2016