It can be easy to assume there is no way out of overwhelming debt, but Chapter 7 bankruptcy may be the answer some people need today. It provides a means by which a debtor can legally liquidate some of the personal property while protecting others, paying down as much debt as possible and erasing the remainder. The primary consumer debts that cannot be eliminated through this process are tax debts, child support and alimony payments, and some student loans. While there are both federal and state exemption options, Ohio requires residents use only state exemptions to protect personal property from liquidation.
How to Keep Your Car
State and federal exemptions differ in this area:
- Federal exemption – $3,225
- Ohio state exemption – up to $1,000
In addition, the debtor must either come to a lump sum payment agreement or continue to make loan payments on a vehicle loan that is secured by that property, otherwise the creditor may be able to exercise their lien and repossess the vehicle.
How to Keep Your Home
- Federal homestead exemption - $20,200
- Ohio state exemption – $5,000
- Property that is held as tenancy by a couple may be exempt against debts owed by just one spouse
Home or property loans secured by that property can only be saved from creditors, even if erased from the credit record by the bankruptcy, if the homeowner continues to make the contracted payments. Otherwise the lien holder has the right to foreclose on the property securing the loan.
Ohio allows exemptions for other forms of personal property:
- Animals, crops, appliances, books, household goods, musical instruments, furnishings, hunting and fishing equipment, and firearms – up to $200 per item or $1,500 total (or $2,000 total in lieu of homestead exemption)
- Beds, bedding, and clothing – up to $200 per item
- A burial plot
- Cash, money due within 90 days, bank and security deposits, and some tax refunds
- A cooking unit and refrigerator – up to $300 each
- Health aids
- Jewelry – up to $200 per item (must be included in the $1,500/$2,000 totals)
- Personal injury recoveries – up to $5,000 received during 12 months before filing (pain & suffering excluded)
- Wrongful death recoveries for someone debtor depended on which is needed for support, received within the 12 months prior to filing
- Tools of the trade – books, implements, and tools of the trade – up to $750
- Seal and official register of notary public
Filing Schedule C of a Bankruptcy Petition
In order to receive their property exemptions within the state of Ohio, debtors must include a Schedule C form containing the following information:
- The property being claimed
- The Ohio state statutes for that property
- The property exemption value for each item
- Each item’s current assessed value (not the market value)
Getting Legal Help
The exemptions for Ohio residents are detailed and complex, and generally require a debtor to enlist the assistance of a bankruptcy attorney to ensure that they are claimed correctly and completely. And while some may consider the cost prohibitive, it can make a great deal of difference in the protections and benefits when an attorney helps frame a bankruptcy petition.
