The Lima News first published this opinion piece.

Household debt has reached record levels across the United States, and Ohio families — including many here in Lima and Allen County — are feeling the financial pressure firsthand.

A recent Federal Reserve Household Debt and Credit Report shows total U.S. household debt climbed to more than $18.5 trillion in the third quarter of 2025, driven by record credit card balances, auto loans and mortgages. The average Ohio household now carries more than $9,000 in credit card debt alone, and delinquency is increasing.

Rampant inflation has made groceries, utilities, medical care, transportation and home ownership more expensive. And property taxes across northwest Ohio rose 25 percent in the last year, even though the median household income in Allen County, for example, remained at approximately $62,000. As across-the-board inflation persists, families in our community struggle to keep pace, pay their bills and pay down debt.

For those trying to stay financially afloat, the choices can seem stark.

Credit counseling and bankruptcy are often the only options available, but both come with significant downsides, including damage to credit scores, lengthy recovery periods and negative social stigmas. Professional debt settlement may offer some borrowers a third way to reduce balances with creditors and avoid disruptive bankruptcy, but Ohio’s outdated debt-settlement laws restrict that option and should be revised.

Debt settlement services may not be the right choice for everyone, of course, and every path for resolving outstanding debt should be carefully considered before taking any financial steps. But those who can benefit from such services should have those tools available.

To better serve Ohio borrowers, state law should be amended to better align with federal consumer protections that allow households access to regulated debt-settlement companies nationwide. The Federal Trade Commission regulates such firms with strict regulations that ban deceptive advertising and protect American households from unscrupulous debt-settlement practices. Under federal rules, settlement companies may not charge any upfront fees until settlement is reached, and they must clearly disclose any and all costs and risks. Ohio law exceeds these commonsense safeguards and imposes additional restrictions that limit consumer choice and render a viable financial tool unavailable to many families.

Fortunately, legislation currently pending in the Ohio House of Representatives and Senate could provide a much-needed solution. The bills would modernize Ohio’s debt-settlement rules to align with federal standards and place debt-settlement providers under the supervision of the Department of Commerce’s Division of Financial Institutions. Additionally, the bills wisely tie service fees to actual debt reductions, so families pay only when results are delivered, and they require clear disclosures and prohibit various misleading practices.

The legislation includes new licensing and bonding requirements that go further than necessary and will likely increase compliance costs and deter smaller firms from entering the market, but these provisions can be reconsidered after implementation and amended as necessary.

Too many Ohio families are one unexpected expense or emergency away from financial crisis. They should have as many reasonable, responsible options as possible for managing their debt and avoiding bankruptcy. Debt-settlement services may not be the right or best choice for every household, but neither are foreclosures, delinquent credit card payments or declaring bankruptcy.

The General Assembly has the opportunity to update Ohio’s over-protective debt-settlement laws and allow consumers more ways to regain their financial footing. It should take it.

Greg R. Lawson is a research fellow with The Buckeye Institute. His column does not necessarily reflect the opinion of The Lima News editorial board or AIM Media, owner of The Lima News.