Bankruptcy Exemptions in Ohio

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BANKRUPTCY EXEMPTIONS
IN OHIO
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Bankruptcy
Bankruptcy filings have reached record highs in
recent years due, in large part, to the recent
recession
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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
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The Ohio bankruptcy exemptions allow most debtors
to avoid losing any assets
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Choosing a Chapter
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Before discussing exemptions a debtor must first
choose which chapter to file under when
considering bankruptcy
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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
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What Are Exemptions?
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EXEMPTIONS are what allow a debtor to retain
property and other assets during the bankruptcy
process
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By law the trustee in a chapter 7 bankruptcy, for
instance, can confiscate and sell a debtors
non-exempt assets to satisfy creditor claims
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An exemption protects an asset from being used
in this fashion
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Bankruptcy Jurisdiction
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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
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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
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States are allowed to create their own
exemptions making it relevant where a debtor
lives at the time he or she files bankruptcy
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Federal vs. State Exemptions
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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
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Ohio Exemptions
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Some commonly used Ohio exemptions include
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Homestead 132,900
Vehicle 3,675 in one motor vehicle
Household Goods 12,250 total and up to 575
in a single item
Cash 450
Retirement/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
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Joint Petition
A debtor who is married and files a joint
petition may double the value of each exemption
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For example, instead of being able to exempt up
to 12,250 in household goods a married couple
can exempt up to 25,000
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Secured Debt
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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
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For example
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
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Re-Affirming Secured Debts
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Some debts involve collateral used to secure the
loan such as a mortgage or car loan
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You may decide to re-affirm the debt, meaning you
plan to continue paying the debt after the
bankruptcy terminates
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Termination of Bankruptcy
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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
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Learn More About Bankruptcy Exemptions in Ohio
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