BANKRUPTCY EXEMPTIONS

IN OHIO

Bankruptcy

Bankruptcy filings have reached record highs in recent years due, in large part, to the recent

recession

Many hard working people who could benefit from bankruptcy hesitate

because of the mistaken belief that bankruptcy results in the loss of

property and belongings

The Ohio bankruptcy exemptions allow most

debtors to avoid losing any assets

Choosing a Chapter

Before discussing exemptions a debtor must first choose

which chapter to file under when considering bankruptcy

An individual may use chapter 7, 11, 12, or 13

Chapter 11 is usually used when a small business is involved

Chapter 12 is for a family fisherman or family farmer

Chapter 13 is a “wage earners” and is usually used if the debtor has an above-average income and/or

valuable non-exempt assets to protect

Chapter 7 is a “liquidation”” and requires the debtor to pass the “means test”

Most debtors who qualify file a chapter 7 because it is quick and results in most assets being discharged,

or erased

What Are Exemptions?

EXEMPTIONS are what allow a debtor to retain property and

other assets during the bankruptcy process

By law the trustee in a chapter 7 bankruptcy, for instance, can

confiscate and sell a debtor’s non-exempt assets

to satisfy creditor claims

An exemption protects an asset from being used in this fashion

Bankruptcy Jurisdiction

Bankruptcy falls under the jurisdiction of the federal courts in the United States, meaning the bankruptcy

process is the same for all debtors regardless of where they live with

one notable exception –

EXEMPTIONS

Bankruptcy falls under the jurisdiction of the federal courts in the United States, meaning the bankruptcy

process is the same for all debtors regardless of where they live with

one notable exception –

States are allowed to create their own exemptions making it

relevant where a debtor lives at the time he

or she files bankruptcy

Federal vs. State Exemptions

U.S. Bankruptcy Code includes a list of federal exemptions

Individual states may also create their own list of exemptions

State decides if a debtor has the choice between using the federal exemption or state exemptions, or

must use the state exemptions

Ohio requires the debtor to use the state exemptions

Ohio Exemptions

Some commonly used Ohio exemptions include:

Homestead – $132,900

Vehicle – $3,675 in one motor vehicle

Household Goods – $12,250 total and up to $575 in a single item

Cash – $450Retirement/Pensions – IRAS and Roth IRAs to

$1,171,150 plus private pension and tax-exempt retirement accounts

Benefits – unemployment and workers’ compensation benefits

Wildcard -- $1,225 in any asset not covered elsewhere

Joint Petition

A debtor who is married and files a joint petition may double the value of each

exemption

For example, instead of being able to exempt up to $12,250 in

household goods a married couple

can exempt up to $25,000

Secured Debt

An Ohio bankruptcy exemption can protect an asset from sale by the trustee but does not prevent the asset from being foreclosed

on or repossessed by the creditor if the asset is security for the

debt

Your home is likely security for your mortgage loan

Assume your home is worth $200,00 and you owe $150,000 on the mortgage loan – you have $50,000

of equity in the home

The Ohio homestead exemption protects the equity but you still owe the debt

If you plan to keep the home you will likely need to enter into a re-affirmation agreement with the

lender

For example:

Re-Affirming Secured Debts

Some debts involve collateral used to secure the loan such as a

mortgage or car loan

You may decide to re-affirm the debt, meaning you plan to

continue paying the debt after the bankruptcy terminates

Termination of Bankruptcy

A chapter 7 bankruptcy typically terminates about 4 months after filing

A chapter 13 will remain open throughout the re-payment period

At the end of a chapter 7 debts will be discharged, or forgiven

After successful completion of the repayment plan in a chapter 13 debts remaining may be discharged

LEARN MORE ABOUT BANKRUPTCY

EXEMPTIONS IN OHIO

Content provided by: Best Legal Practices

Click to visit: thecolumbusbankruptcylawyer.com