Filing for bankruptcy does not mean you will lose all of your possessions to your creditors. Exempt property cannot be repossessed or liquidated by your creditors to fulfill outstanding debt obligations. Bankruptcy exemptions allow you to shield certain property from your creditors. With Chapter 7 bankruptcy, the exemptions allow you to keep property subject to the exemption protections. With Chapter 13 bankruptcy, the exemptions will play a role in calculating how much you will need to pay back your creditors.
What Assets Are Exempt in Bankruptcy?
Some states, such as Ohio, have their own set of exemptions to be used when you file for bankruptcy. Federal law also has a set of bankruptcy exemptions. Some states allow you to pick which set, state or federal, of bankruptcy exemptions you want to employ during bankruptcy proceedings. In Ohio, you are required to use the exemptions established by Ohio state law. In addition to the state law exemptions, however, you have the option of using federal nonbankruptcy exemptions. These exemptions provide protection for assets such as federal and military benefits.
To claim your bankruptcy exemptions, you are required to complete a list of exemptions you are claiming on official bankruptcy forms. If you and your spouse are filing jointly for bankruptcy, you are allowed to double the allotted exemption amounts. This is because each spouse has the right to claim the full exemption amount for any property they owe. There is a fairly sizeable list of exemptions that can be claimed in bankruptcy. Some of the most commonly claimed exemption in Ohio bankruptcy cases include:
- Homestead: $145,425 of equity in one piece of real or personal property that you or a dependent uses as a residence.
- $500 in cash on hand
- $4,000 of the value in one motor vehicle
- $13,400 of the value in household goods (this includes things like appliances and furniture).
- Only up to $625 per individual item is allowed to be claimed.
- Wages: 75% of your disposable earnings
- Pensions and public benefits: many have no coverage limit for exemption
- Wrongful death awards, unemployment compensation, crime victims’ compensation: no coverage limit for exemption
- Tools of the trade: up to $2,550 of value in tools of your trade, job, or business
These are current types of exemptions and corresponding amounts that are allowed for each exemption. They are subject to change.
Ohio Bankruptcy Attorney
Declaring bankruptcy does not mean that you will be left with nothing. Bankruptcy is meant to give you a fresh start and that fresh start will include items protected by bankruptcy exemptions. At Miami Valley Bankruptcy, our team of dedicated attorneys works with you throughout the bankruptcy process. We make sure that you are maximizing the benefits provided to you by Ohio’s bankruptcy exemption laws. We stay current on any updates in bankruptcy legislation and protect the best interests of our clients. Contact us today.