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Bankruptcy: Ohio

Filing bankruptcy in Ohio aims to achieve two things:  First, it gives debtors a chance to overcome crushing debt, and second it allows creditors to be repaid to the extent that the debtor’s property value or earnings permit. 69,266 bankruptcies were filed in Ohio in 2010, ranking Ohio 12th in the country for the number of bankruptcy filings per capita. 77% of Ohio’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.

Filing Bankruptcy in Ohio

Federal law governs bankruptcy proceedings in Ohio, and as such all bankruptcy cases are filed in the US Bankruptcy Courts located in:

  • Ohio Northern District Court: Akron, Canton, Cleveland, Jefferson, Mansfield, Toledo, Youngstown
  • Ohio Southern District Court: Cincinnati, Columbus, Dayton, Portsmouth, Steubenville, Zanesville

While federal courts have jurisdiction over bankruptcy proceedings, Ohio law prohibits petitioners from using the exemptions listed in the U.S. bankruptcy code, instead requiring debtors to choose from the state exemption list. An Ohio bankruptcy attorney can assist debtors to fully understand what personal property the exemptions permit the petitioner to keep in bankruptcy, and what must be sold.

Chapter 7 Bankruptcy, Ohio

Chapter 7 bankruptcies in Ohio are the most common bankruptcy filing.  Chapter 7 is most suitable for petitioners who do not have significant assets such as investments or substantial equity in a home, for the reason that a Bankruptcy Trustee may liquidate personal property that isn’t protected by Ohio’s bankruptcy exemptions. Liquidation occurs when the Trustee converts personal assets to cash for distribution to creditors. Ohio’s Chapter 7 bankruptcy law allows debtors to keep some essential property and the exempt assets are off-limits to creditors seeking repayment.

The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.

Ohio Bankruptcy Exemptions

Ohio bankruptcy law classifies specific property exemptions that allow debtors to keep certain personal property and assets so they may move forward from bankruptcy as productive members of society.  To put it plainly, this means creditors cannot force debtors to sell the shirt off their backs to settle a debt.  Bankruptcy in Ohio permits petitioners to choose exemptions only from the state list.

Property exemption values are subject to change, so it is recommended that individuals or couples considering bankruptcy seek the counsel of an Ohio bankruptcy attorney and discuss the options open to them.  Ohio bankruptcy exemptions include:

Ohio Homestead Exemption

  • $21,625 total: Real or personal property used as residence

Ohio Tenancy by Entirety Exemption

  • Property held as tenancy by the entirety created prior to April 4th 1985 may be exempt against debts owed by only one spouse

Ohio Personal Property Exemption

  • $400 total: Cash, money due within 90 days, tax refund, bank, security and utility deposits (Husband and wife may double)
  • $11,525 total: Animals, crops, books, musical instruments, appliances, household goods, furnishings, firearms, hunting and fishing equipment, not exceeding $525 per item
  • $1,450: Jewelry for 1 or more items
  • $3,450 total: Motor vehicle
  • Health aids
  • Tuition credit or payment
  • Lost future earnings needed for support, received during 12 months before filing
  • $21,625 total: Personal injury recoveries received during 12 months prior to filing
  • Wrongful death recoveries for person debtor depended on, needed for support, received during 12 months prior to filing
  • Burial plot

Ohio Tools of Trade Exemption

  • $2,175 total: Implements, books and tools of trade

Ohio Wage Garnishment Exemption

  • 75% of disposable weekly earnings or 40 times the federal hourly minimum wage, whichever is higher (Low-income debtors may be authorized for more)

Ohio Public Benefits Exemption

  • Disability assistance payments
  • Public assistance
  • Workers’ and Unemployment compensation
  • Vocational rehabilitation benefits
  • Crime victim’s compensation, received during 12 months before filing

Ohio Insurance Exemption

  • $5,000 total: Benevolent society benefits
  • Disability benefits needed for support
  • Fraternal benefit society benefits
  • Group life insurance policy or proceeds
  • Life insurance proceeds for a spouse
  • Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors
  • Life, endowment, or annuity contract avails for your spouse, child, or dependent

Ohio Pensions and Retirement Savings Exemption

  • Police officers, Firefighters and Volunteer firefighters’ dependents
  • Public employees
  • Public safety officers’ death benefit
  • Public school employees
  • State highway patrol employees
  • ERISA-qualified benefits needed for support
  • IRAs and Keoghs needed for support

Ohio Miscellaneous Exemption

  • Property of business partnership
  • Alimony, child support and allowances needed for support

Ohio Wild Card Exemption

  • $1,150 total: Any property

Chapter 13 Bankruptcy, Ohio

In 2010, 13% of petitioners filed for protection under Chapter 13 bankruptcy in Ohio.  Filing Chapter 13 bankruptcy in Ohio starts a financial reorganization process in which a court-appointed Trustee negotiates with creditors and implements a 3-5 year repayment plan using the debtor’s future earnings to repay creditors.  Chapter 13 petitioners in Ohio keep most – or all – of their property.

How to File Bankruptcy in Ohio

Qualifying for property exemptions should be a primary factor in deciding whether to file for bankruptcy protection from creditors. The aim is to protect major assets and discharge debts. Because each bankruptcy case is unique, an Ohio bankruptcy attorney can advise debtors of their financial choices concerning Chapter 7 and Chapter 13 bankruptcies.

Bankruptcy Attorney: Ohio

It is the bankruptcy petitioner’s obligation to know their rights and responsibilities as a debtor.  The bankruptcy process can be upsetting and complex for some.  An Ohio bankruptcy attorney can guide petitioners through bankruptcy exemption procedures and provide valuable counsel on the suitable bankruptcy options for their financial situation.