Ohio, like most states, has its own set of exemptions that a debtor uses when they file for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property you can keep in a Chapter 7 filing or what amount you must pay to certain creditors if the property is unexmpt.
An example of how exemptions works is to consider a house that you own. The house is worth $100,000; however, you have a mortgage on the property worth $70,000. In this case there is $30,000 in equity ($100,000 – $70,000 = $30,000). Under Ohio and other state exemption laws, you would apply the statutory amount allowed for the exemption to the equity;
the equity covered by the exemption is the debtors. Any equity in the property that is not covered by the exemption must be distributed to unsecured creditors in a Chapter 7 or 13. For example, as of January 2013, the exemption amount for real property or personal property used as a residence in Ohio is $21,625 per debtor with an interest in the property.
So under our example above, a single debtor will not be able to completely cover their equity in the property ($30,000 equity – $21,625 exemption = $8,375 unexempt). However, if both a husband and a wife have interest in the residence and file for bankruptcy, they would be able to completely exempt the equity in the property ($30,000 equity – up to $43,250 in equity = completely exempt).
Ohio’s exemptions are covered under the Ohio Revised Code Section 2329.66. Beginning March 20, 2013 the homestead exemption in Ohio will increase from $21,625 per person to $125,000 per person. This significant amount of exemption will allow many debtors who had unexempt real property to claim an exemption and perhaps avoid filing a Chapter 13.
To see how bankruptcy can benefit you and maximize your exemptions, contact the Law Office of Zachary Bushatz at 937-321-1529 today.