According to a report issued by the Federal Judiciary, there were 47,893 bankruptcies filed in Ohio last year alone, of which, 46,946 were designated as individual consumer bankruptcies. And, while these numbers represent a small drop from the year before, they nevertheless illustrate just how important the protections offered by bankruptcy are to thousands of individuals every year in Ohio.
Sadly, however, many people in Ohio avoid bankruptcy due to their misconception that they will lose everything they own during the process. In actuality, Ohio bankruptcy law expressly permits individuals to "exempt" several types of property from the bankruptcy estate, meaning they can keep this property even after filing for bankruptcy. However, careful planning is often required in order to maximize the assets that are protected during an Ohio bankruptcy.
Important Ohio bankruptcy exemptions
Interestingly, while the federal bankruptcy code does specify several specific exemptions permitted under the law, it also authorizes individual states to opt out of the federal exemptions and create their own, which Ohio has in fact done. Indeed, Ohio law clearly indicates that individuals domiciled in the state cannot use the federal bankruptcy exemptions.
Consequently, those filing bankruptcy in Ohio must utilize the bankruptcy exemptions created under state law. Some of the more important, and commonly used, bankruptcy exemptions in Ohio include:
- An exemption for an individual's personal residence, otherwise known as the homestead exemption, up to a value of $132,900
- An exemption for an individual's motor vehicle, up to a value of $3,675
- An exemption for an individual's personal property, such as household goods and furniture, up to value of $12,250
- An exemption for an individual's jewelry, up to a value of $1,550
- A "wildcard" exemption that can be use on any property, up to a value of $1,225
Of those listed above, it is quite likely that the most significant exemption for many is the homestead exemption. This is not only due to the fact that it is the largest but also because married couples can double this exemption - thus totaling $265,800 - if they are jointly filing bankruptcy and both own the home. Moreover, even if the couple still has an outstanding mortgage, this particular exemption also protects the equity they have established in the home, up to the same exemption amount.
Expert legal counsel may be necessary
Ultimately, given the potential complexities associated with filing bankruptcy in Ohio - not to mention that each person's situation is different - it is often a good idea to consult with an experienced bankruptcy attorney to learn what options may be best given your circumstances. A qualified attorney can help assess your various debts and explain the often-confusing bankruptcy laws.