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Some Ohio consumers who are struggling with their financial obligations might be considering debt consolidation. However, one issue is that it does not address what is in many cases the root of the problem.

For example, one man was struggling to avoid filing for bankruptcy a second time. He took out a $17,000 loan from a credit union that he was supposed to pay off over five years. He then used the loan to pay off 10 credit cards. With this new debt, his interest rate went down to 8 percent, and his fixed monthly payment was $375. However, his daughter was a single mother, and he also took out a payday loan to help her with expenses. Repaying these loans left him struggling. Then his daughter had to spend a $5,000 tax refund on her children after losing her job that she had intended to use to pay him back.

Despite these struggles, he said that around 60 percent of his debt issues were because he was not careful with his spending. When he wanted to go to a movie or buy a computer, he simply charged it. After filing for a Chapter 13 bankruptcy in which he would pay his creditors back over five years, he said he changed his spending habits.

People may fall into debt for a number of reasons that may or may not be related to their spending habits. Job loss, divorce or illness could contribute to unmanageable debt. Nevertheless, the person might hesitate to file for bankruptcy because of bankruptcy myths. For example, some people might think they will lose all their possessions. However, in a Chapter 7 bankruptcy, some assets are exempt, and in a Chapter 13 bankruptcy, a person can arrange to restructure their obligations and keep assets such as a home.