How Much Cash Can You Keep When Filing Chapter 7 in Ohio?

How Much Cash Can You Keep When Filing Chapter 7 in Ohio?

If you have been affected by the recent economic downturn, by the closure of a plant, or through job loss, and you have been staying up nights worrying about how to get your finances in order, declaring chapter 7 bankruptcy may be an option. You probably have a lot of questions. Will you lose your house? How much cash can you keep when filing chapter 7 in Ohio? We have information below about the exemptions you are allowed to have here in Ohio when you file chapter 7.

What Is An Exemption in a Bankruptcy?

A lot of people think when they file for bankruptcy, they will be out on the street with nothing but the clothes on their backs, but that isn’t the case. Instead, all of your debts and assets are held by a trustee who manages them. It is the trustee's job to sell off your property to pay your debts.

Ohio law allows for exemptions when you file for a chapter 7. That means that you will be able to keep some--and sometimes all--of your property because it is exempt. When property is exempt in chapter 7, it means that the trustee cannot sell it to pay off your debt. Like many states, Ohio has a list of exemptions to make sure that you have some property left to live your daily life and conduct business.

When you qualify for a chapter 7 bankruptcy, part of the trustee’s job is to figure out how much property you have, and what the value of the property is. The trustee will sell any property that is not exempt and give the money from the sale to your creditors. Once your property has sold, and the money is distributed, your debts are discharged and you start again with a clean slate.

What Kinds of Property Is Exempt Under Ohio Law? Is Cash Exempt? How Much Can I Have?

Ohio law lists several different kinds of property that are exempt from being sold by the trustee. First, you need to know that in many states, you have the choice to use the state bankruptcy law or federal bankruptcy law to protect your property. In Ohio, you must use the Ohio bankruptcy exemptions. Ohio laws are geared towards consumer protection, which means they are favorable to you holding onto more of your property.

Here are items that can be exempt in an Ohio chapter 7 Bankruptcy and how much is allowed for each item, according to current Ohio law. You need to know that if you are married, your limit on exemptions is doubled, because there are two of you. Also, the assets are valued based on a liquidation value, rather than market cost. Liquidation value means the amount that any asset would be worth after all holds on the property are subtracted. If you have an IRS lien on your home of $50,000, and your home is worth $100,000, the liquidation value is $50,000.

Exempted Items Include:

  • Your home is exempted up to $145,425
  • Your car is exempted up to $4000
  • You can have up to $500 in cash on hand or in your bank account
  • Household items are exempt up to $325, for a maximum of $13,400. Single items that are worth more than $600 are not exempt
  • You can exempt jewelry up to $1700
  • The tools you need for work are exempt up to $2440
  • If you have filed a personal injury claim, $25,175 is exempt
  • Your life insurance policy, burial plots or insurance, worker’s compensation, unemployment and nearly all forms of retirement are exempt from sale
  • You also get a wildcard amount. You can exempt an additional $1325 on any property you want. This amount can be split up using a little under each exemption category, or you can use it to protect one piece of property from being sold

If you need help with deciding whether chapter 7 Bankruptcy is right for you, schedule a FREE Bankruptcy consultation with our experienced Ohio bankruptcy lawyers.

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