bankruptcy exemptions in ohio
DESCRIPTION
Many hard working people who could benefit from bankruptcy hesitate because of the mistaken belief that bankruptcy results in the loss of property and belongings. This presentation talks about how Ohio bankruptcy exemptions allow most debtors to avoid losing any assets.TRANSCRIPT
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BANKRUPTCY EXEMPTIONS
IN OHIO
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Bankruptcy
Bankruptcy filings have reached record highs in recent years due, in large part, to the recent
recession
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Many hard working people who could benefit from bankruptcy hesitate
because of the mistaken belief that bankruptcy results in the loss of
property and belongings
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The Ohio bankruptcy exemptions allow most
debtors to avoid losing any assets
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Choosing a Chapter
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Before discussing exemptions a debtor must first choose
which chapter to file under when considering bankruptcy
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An individual may use chapter 7, 11, 12, or 13
Chapter 11 is usually used when a small business is involved
Chapter 12 is for a family fisherman or family farmer
Chapter 13 is a “wage earners” and is usually used if the debtor has an above-average income and/or
valuable non-exempt assets to protect
Chapter 7 is a “liquidation”” and requires the debtor to pass the “means test”
Most debtors who qualify file a chapter 7 because it is quick and results in most assets being discharged,
or erased
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What Are Exemptions?
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EXEMPTIONS are what allow a debtor to retain property and
other assets during the bankruptcy process
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By law the trustee in a chapter 7 bankruptcy, for instance, can
confiscate and sell a debtor’s non-exempt assets
to satisfy creditor claims
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An exemption protects an asset from being used in this fashion
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Bankruptcy Jurisdiction
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Bankruptcy falls under the jurisdiction of the federal courts in the United States, meaning the bankruptcy
process is the same for all debtors regardless of where they live with
one notable exception –
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EXEMPTIONS
Bankruptcy falls under the jurisdiction of the federal courts in the United States, meaning the bankruptcy
process is the same for all debtors regardless of where they live with
one notable exception –
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States are allowed to create their own exemptions making it
relevant where a debtor lives at the time he
or she files bankruptcy
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Federal vs. State Exemptions
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U.S. Bankruptcy Code includes a list of federal exemptions
Individual states may also create their own list of exemptions
State decides if a debtor has the choice between using the federal exemption or state exemptions, or
must use the state exemptions
Ohio requires the debtor to use the state exemptions
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Ohio Exemptions
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Some commonly used Ohio exemptions include:
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Homestead – $132,900
Vehicle – $3,675 in one motor vehicle
Household Goods – $12,250 total and up to $575 in a single item
Cash – $450Retirement/Pensions – IRAS and Roth IRAs to
$1,171,150 plus private pension and tax-exempt retirement accounts
Benefits – unemployment and workers’ compensation benefits
Wildcard -- $1,225 in any asset not covered elsewhere
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Joint Petition
A debtor who is married and files a joint petition may double the value of each
exemption
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For example, instead of being able to exempt up to $12,250 in
household goods a married couple
can exempt up to $25,000
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Secured Debt
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An Ohio bankruptcy exemption can protect an asset from sale by the trustee but does not prevent the asset from being foreclosed
on or repossessed by the creditor if the asset is security for the
debt
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Your home is likely security for your mortgage loan
Assume your home is worth $200,00 and you owe $150,000 on the mortgage loan – you have $50,000
of equity in the home
The Ohio homestead exemption protects the equity but you still owe the debt
If you plan to keep the home you will likely need to enter into a re-affirmation agreement with the
lender
For example:
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Re-Affirming Secured Debts
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Some debts involve collateral used to secure the loan such as a
mortgage or car loan
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You may decide to re-affirm the debt, meaning you plan to
continue paying the debt after the bankruptcy terminates
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Termination of Bankruptcy
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A chapter 7 bankruptcy typically terminates about 4 months after filing
A chapter 13 will remain open throughout the re-payment period
At the end of a chapter 7 debts will be discharged, or forgiven
After successful completion of the repayment plan in a chapter 13 debts remaining may be discharged
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LEARN MORE ABOUT BANKRUPTCY
EXEMPTIONS IN OHIO
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Content provided by: Best Legal Practices
Click to visit: thecolumbusbankruptcylawyer.com