Also, to qualify for the state’s bankruptcy exemptions you must have lived in Ohio for at least 730 days before filing.
Cleveland, OH – Many people prefer struggling with debt month after month rather than filing for bankruptcy for one reason. They are afraid they will lose everything they own if they do that.
If that’s what’s keeping you up at night, you will be happy to learn that you have no reason to fear you will lose everything. All you need is to talk to experienced lawyers and learn how you can use Ohio’s bankruptcy exemptions to your benefit.
What are bankruptcy exemptions?
If you file for bankruptcy you won’t end up on the street with only the clothes on your back. Our legislators created bankruptcy laws to allow people to escape a terrible situation and move on. No one wants to turn people out of their homes and leave them unable to earn a living as they’d quickly become a burden to the state.
In Ohio, you cannot use the federal bankruptcy exemptions, but that won’t be a problem. The state’s bankruptcy exemptions will allow you to save most of your assets if used wisely.
The first step on the road to financial recovery is to set up a consultation with skilled Cleveland bankruptcy lawyers to decide which type of bankruptcy is right for you, Chapter 7 or Chapter 13.
Most people with low income and considerable credit card debt will qualify for Chapter 7, under which your non-exempt assets will be sold by the court-appointed trustee.
What is the Ohio Homestead Exemption?
Under Ohio laws, if you file for bankruptcy under Chapter 7 you can protect up to $145,425 in home equity and this sum may be just enough to let you keep your home.
Equity is defined as the difference between the market value of your house and the money you still owe on it. If your equity is below $145,425 you won’t lose your house. You will however have to keep paying your mortgage.
When the equity is higher than the Homestead exemptions, knowledgeable Ohio bankruptcy lawyers advise their clients to have their spouse file for bankruptcy at the same time. If you do that, you can double the Homestead Exemption amount, which is often enough to save your house from being sold.
There are a few legal requirements to keep in mind. To be able to file for bankruptcy in Ohio you must have been a legal resident in the state for at least six months.
Also, to qualify for the state’s bankruptcy exemptions you must have lived in Ohio for at least 730 days before filing. If not, you can still file for bankruptcy in Cleveland but use the exemptions available in the state you lived in before moving to Ohio.
Other exemptions available in Ohio
Talk to your Cleveland bankruptcy lawyers about the legal ways to protect other assets. Ohio offers many types of bankruptcy exemptions, including:
- Motor vehicle exemption – if your equity in your car is less than $4,000, you get to keep the vehicle
- Tools of trade exemption: $2,550 in trade tools, books, and implements
- Personal property exemptions include burial plot, $500 cash, $13,400 in clothing, household goods, and furnishings, but only if an item is worth less than $625 per item, $1,700 in jewelry, unlimited health aids
- Wildcard exemption – $1,325 that can be used to protect personal property, but this exemption cannot be used to increase the value of your homestead exemption.
If you have any more questions about bankruptcy, see a lawyer as soon as possible. If you use Chapter 7, the whole process will be over in a few months. Also, it might be a good time to educate yourself a bit more on legal matters.