What You Can Keep When You Declare Bankruptcy in Ohio

Residence house on a female handOn April 1, 2013 the Ohio bankruptcy exemptions increased for the third time as a result of a 9% statutory cost of living adjustment. Ohio’s exemption statute is RC 2329.66. In 2009 the Ohio legislature passed a revamped exemption statute containing a cost-of-living adjustment provision.  Normally the upward adjustment is merely a nominal amount which does not have much impact on your personal assets.

Ohio Homestead Exemption Goes Up Twice in One Week

However, a funny thing happened regarding the Homestead exemption. The Homestead exemption is that amount of equity you can keep in your residence free of claims by creditors. Remember, the amount of the exemption applies to each titled owner on the deed. On March 27 the Ohio Homestead exemption increased to $125,000. This was a very significant rise of nearly 500%. Because of the way the new exemption statute was drafted, it again increased to $132,900 after just 4 days.

Increased Ohio Bankruptcy Exemptions

Here is a list of Ohio bankruptcy exemptions which each increased on April 1, 2013:

  1. Homestead:  $132,900
  2. motor vehicle:  $3675
  3. Cash on hand: $450
  4. individual item of household goods $575
  5. aggregate value of household goods: $12,250
  6. jewelry: $1550
  7. tools of trade: $2325
  8. personal injury claim: $23,000
  9. wildcard (apply to any property): $1225

So What if Ohio Bankruptcy Exemptions Increase?

Understanding how the Ohio bankruptcy exemption laws increased and applying them to your property is a key to success in filing bankruptcy.  These laws define who can file for relief under chapter 7, and who might need to rely on chapter 13 to protect their property. If you need to file chapter 13 proper application of the exemptions will you insure that you are not overpaying your unsecured creditors.  One of the tests for repayment of creditors in a chapter 13 is what they would receive in Chapter 7 liquidation. If you do not claim the exemptions to which you are entitled on schedule C of the bankruptcy petition your creditors can receive a distribution of assets that you otherwise would have kept.

If you are planning to file bankruptcy the first question to ask your lawyer is whether he knows about the 2013 Ohio exemption increases.

 

 

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