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A Guide to Ohio Bankruptcy Exemptions

A Guide to Ohio Bankruptcy Exemptions

Why People File Bankruptcy

Many Americans throughout the nation are finding it difficult to meet their financial obligations and are racking up large amounts of credit card debt. People without a job that affords them healthcare benefits may have run up thousands of dollars in medical bills they are unable to pay. With the rising cost of living and unemployment, more individuals see filing for bankruptcy as a way out. Many debts under Chapter 7 can be discharged, including taxes that are over three years old. If you own Uncle Sam a pile of money, the federal government ironically allows you to wipe this out through bankruptcy.

What Property Can I Keep?

There is a common misconception that people will lose everything if they file bankruptcy. This is actually not true as the law allows debtors to keep certain property exempt from the actual case. The trustee cannot sell off exempt assets to pay off the creditors. The exemptions apply to people that file either Chapter 7 or Chapter 13. The exempt amount is the value of each asset that the law allows the debtor to keep. For example, if your car is worth $5,000 and the outstanding loan balance is $3,000, this means that you have $2,000 in equity in the car. Since Ohio’s motor vehicle exemption is $3,450, you would be able to keep your car.

Ohio State Bankruptcy Exemptions

Residents of Ohio are not allowed to use the federal bankruptcy exemptions. Petitioners must use the following list of state exemptions to protect their property:

  • Real or personal property used as a residence—$21,625
  • Motor vehicles—Up to $3,450
  • Household goods and furnishing—$11,525
  • Tools used in trade, profession or business—$2,175
  • Jewelry—$1,450
  • Cash or bank deposits—$400
  • Individual retirement accounts—Unlimited
  • Personal injury settlement—$21,625 (if received one year prior to filing petition)
  • Wild card (can be applied to any asset)—$1,175
  • Disposable wages—Up to 75 percent of weekly income can be kept

Each of the above amounts is for single debtors and may be doubled if a married couple files jointly. In addition, there are other unlimited exemptions that may be applicable in your case. Some of these include workers compensation and unemployment benefits. All pensions, profit sharing and 401K assets are exempt by federal law.

Don’t Leave Off a Creditor

There are many reasons people leave a creditor off their bankruptcy petition, such as:

  • They are a close friend or family member
  • It was someone you don’t want knowing that you filed for bankruptcy
  • A credit card that you wanted to keep
  • You thought the credit report would list all of your bills

Making the mistake of leaving someone off your bankruptcy petition can cost you a bundle. Take the time and gather all the necessary documents and bring them to your lawyer.

Legal Guidance From an Ohio Bankruptcy Lawyer

When you hire an experienced bankruptcy attorney, they will help you through the entire legal process. The laws are difficult to understand and navigating through the court system can be frightening. Take the time to come up with a list of questions you have regarding your case. When you meet with your lawyer, make sure to get the answers you need.

Photo courtesy of mikecogh.

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