Filing for bankruptcy is a stressful process, you don’t need confusing legal terms and changing laws to make it more difficult. To be clear, bankruptcy is a federal law, but regulations regarding personal property exemptions vary by state. Ohio has some of the most stringent exemption laws in the country.

Here is an overview of personal property that is considered exempt in an Ohio Bankruptcy.

What Does Exempt Mean, Exactly?

Just because you are declaring bankruptcy, does not mean that you have to lose all of your possessions. Exempt property is the name given to things that the debtor can keep after filing for bankruptcy. In other words, creditors cannot repossess or liquidate property that is claimed as exempt according to the state in which bankruptcy is filed. It is crucial that you have an attorney assist you in applying these exemptions so that your trustee doesn’t take property that you are rightfully entitled to keep!

The idea is that a person will need a financial and physical foundation from which to start working to get out of bankruptcy.

How Do Loans Apply?

The exemption limit applies to the equity that the person declaring bankruptcy has in each piece of property. Equity is the difference between the actual value of the property and what is owed for it. If your house is valued at $170,000, for example, and the value of your mortgage is $100,000, then it has an equity value of $70,000.

When declaring bankruptcy, you can choose to keep property – such as a home or car – that is secured by a loan, if:

  • the equity of the property is covered by exemptions in Ohio,
  • AND you are up-to-date on loan payments (in a chapter 7).

If you want to keep your home and the equity is not entirely exempt, the trustee may liquidate the property anyway. At that point, you should receive cash equal to the value of your exemption.

If you are not up-to-date on your loan payments, or if you have unexempt equity, you should talk to your attorney about whether a Chapter 13 Restructuring is right for you.

What Property is Exempt in Ohio?

Each individual, or partner in a married couple which is filing jointly, can claim a full set of exemptions. In Ohio, property that is protected from creditors includes:

House

  • Up to $136,925 of home equity.

This applies to one piece of real estate used as the residence for the person declaring bankruptcy or dependents. In Ohio, the homestead exemption can’t be applied to rental properties owned by the debtor.

Personal Possessions

  • Up to $475 in cash, security deposit, savings plans, tax refund, HSAs or money owed with 90 days.
  • Up to $3,775 in value for one vehicle.
  • Up to $12,625 in household items, including furniture and appliances with a single-item value below $600.
  • Up to $1,600 in value of jewelry.
  • The value of one burial plot.
  • Up to $2,400 in work equipment and tools.

Income

Wages equaling more than:

  • 130 times the federal minimum hourly wage (if paid monthly; varies for weekly or biweekly pay), OR 75% of disposable weekly earnings.

The following sources of income are also exempt:

  • Public assistance,
  • Unemployment Compensation,
  • Disability benefits,
  • Veteran’s Benefits,
  • Worker’s Compensation Benefits,
  • Ohio Works First (OWF),
  • Alimony and child support,
  • Disability Assistance (DFA) from the Ohio Department of Human Services,
  • Supplemental Security Income (S.S.I.),
  • Black Lung Benefits,
  • Tax Refunds from the Earned Income Credit or Child Tax Credit,
  • Crime victims’ compensation collected within one year of declaring bankruptcy.

Pension

  • Social Security retirement,
  • Tax-exempt retirement accounts (this includes 401(k)s, 403(b)s, SEP and SIMPLE IRAs),
  • IRAS and Roth IRAs
  • Pensions for employees of public offices, schools, police officers, firefighters, highway patrol.

Wildcard

Up to $1,250 of any property.

Other

Any applicable Federal Nonbankruptcy Exemptions.

There are many other state laws regulating and limiting bankruptcy exemptions in Ohio. Things like jointly owned properties and business, endowments, benefits of spouses and dependents, as well as insurance benefits largely complicate the issue of bankruptcy.

Review other advice and helpful information regarding bankruptcy.

Bankruptcy Lawyer Who Protects Your Interests

If you’re facing bankruptcy, don’t go it alone. Experienced bankruptcy lawyers know all of the intricate details related to exemptions. They will guide you in making the important decisions regarding your property and financial security.

For professional legal advice regarding bankruptcy and foreclosure, contact Amourgis & Associates today at (800) 444-1967.

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