Bankruptcy Exemption Basics in Ohio

People may be wary of filing bankruptcy because they have heard that they may lose many of their assets, including their homes and cars. This is totally incorrect, as there are exemptions under Ohio Law that allow you to keep most, if not all, of your property in bankruptcy. No two bankruptcy cases are the same, as everybody has different and varying amounts of assets, but our attorneys will determine the best bankruptcy to protect your assets while eliminating your debt. Below you will find information on the available bankruptcy exemptions under Ohio law. For more information on how these exemptions will apply to your specific case, contact Harold Jarnicki and Associates.

Under Ohio law, certain types of property are considered exempt during bankruptcy. This means that in a Chapter 7 or Chapter 13 filing, the bankruptcy trustee cannot seize this exempt property and sell it to satisfy some of the debt you owe. At the law office of Harold Jarnicki and Associates, our attorneys know the detailed exemptions and will explain your rights to wiping your debt while keeping your assets.

Three of the most important exemptions under Ohio law are for the house, the car, and retirement accounts:

The Homestead Exemption

Under Ohio’s exemption statute (ORC §2329.66), individuals filing for bankruptcy are allowed to exempt 132,900 in equity in their primary residence. Those filing jointly with a spouse are generally allowed to double this amount to $265,800.

If there is still a mortgage on the property, the equity is determined by subtracting the amount owed on the mortgage from the value of the property. The value is the current, real market value of the property if you were to sell it today, not what you paid for it. For example, if you and your spouse’s home would sell for $400,000 in today’s market and you owe $180,000 on the mortgage, then the amount of equity you would own in your home is $220,000 – well within the joint homestead exemption. Remember, even if there is more equity in your home than the allotted exemptions, our attorneys will provide you the best options to filing a bankruptcy and still keep the excess equity in your home.

The Auto Exemption

State law also allows individual Chapter 7 bankruptcy filers to exempt equity in their car, and if the bankruptcy is a joint filing (husband and wife), exemptions are generally allowed for two vehicles, one exemption for each spouse’s vehicle. Our attorneys will discuss all of the specific exemption allowances and determine which bankruptcy is most appropriate for you, so you can keep your vehicle and eliminate your debt.

Retirement Account Exemptions

In general, all of the money you have in your retirement accounts is exempt from bankruptcy proceedings. This includes 401ks, IRAs, Roth IRAs, pensions, annuities, 403B’s, education individual retirement accounts, Keogh IRAs, H.R. 10 plans, PERS, SERS, Deferred Compensation, and Ohio Public Safety Officers Death Benefit Funds and other tax exempt retirement funds, including direct transfers and rollover distributions. Therefore, DO NOT cash out, withdraw from, or take a loan against any of your retirement before speaking with one of our bankruptcy attorneys! We can advise you on how to keep ALL of your retirement while still filing bankruptcy.

Bankruptcy filers are allowed to exempt the full value of the following assets, with certain restrictions. This means that usually, none of the following assets will be taken from you in a bankruptcy:

  • Life Insurance
  • Health Insurance Proceeds
  • State and Federal Benefit Programs, Including Workers’ Compensation, Disability, and Unemployment Benefits
  • Ohio Works First Cash Assistance
  • Benefits-Services from Prevention, Retention, and Contingency Programs
  • Child and Spousal Support
  • Federal Earned Income Tax Credit and Child Tax Credit
  • Tuition Payment Contracts
  • Reparations for Crime Victims
  • Awards in Wrongful Death Actions
  • Partnership Property
  • Seal and Register of Public Notary
  • Health Aids
  • Burial Lots

Additional Exemptions

Some of the other exemptions that are available under Ohio law include:

  • Cash
  • Jewelry
  • Tools of Your Trade, Business, or Profession
  • Proceeds from a Personal Injury Award

The Wildcard Exemption

Finally, Ohio law provides a general exemption up to $1,225 that may be used by filers to provide additional equity protection to any of the exemption classes. For example, if you had $4000 excess equity in your car, you could use the wildcard exemption along with the vehicle exemption to help protect your car from the bankruptcy estate.

Conclusion

Those who have found themselves struggling with debt should not write off bankruptcy as an option before speaking with an attorney. Last year, Ohio expanded the value of its exemptions to make it easier for those filing for bankruptcy to keep more of the property they have worked so hard to acquire.

At Harold Jarnicki and Associates, our lawyers will explain which exemptions apply to your case and how bankruptcy can clear up your debts and protect your assets. For more information on bankruptcy exemptions in both Chapter 7 and Chapter 13, contact Harold Jarnicki and Associates today.