Filing for bankruptcy can feel like walking a tightrope. On one side is the relief of debt discharge. On the other, the potential loss of your property.
The good news is that bankruptcy exemptions act as a safety net, preventing a complete fall. Understanding these exemptions is crucial.
Understanding bankruptcy exemptions
Bankruptcy exemptions let you protect specific assets when filing. These laws vary by state, and Ohio has its own set of rules. The purpose is to ensure you retain essential items while satisfying creditors as much as possible.
Common exemptions in Ohio
Here are key exemptions available in Ohio:
- Homestead exemption: Up to $145,425 per person
- Motor vehicle: Up to $4,000 in equity
- Household goods: Up to $13,400 total, with a $625 limit per item
- Jewelry: Up to $1,700
- Cash and deposits: Up to $500
- Tools of trade: Up to $2,550
- Wildcard exemption: Up to $1,325 for any property
Ohio residents can choose between federal or state exemptions. Most find Ohio’s state exemptions more favorable.
The law updates these exemption amounts periodically to account for inflation. The exact property you keep depends on which bankruptcy chapter you file and your unique financial situation.
Important considerations
Bankruptcy filing requires full disclosure of all assets and debts. Attempts to hide assets can result in denial of your bankruptcy discharge and possible criminal charges. Also, secured debts like mortgages and car loans need continued payment if you want to keep those items.
Many people feel surprised at how much property they can legally protect through proper exemption planning. An attorney can help maximize these protections based on your specific circumstances.