Anyone thinking about filing for bankruptcy is bombarded by many questions of the unknown. What will happen to my credit? Will I ever get a loan again? Are my assets going to be seized? While all of these are commonly associated with misconceptions about bankruptcy, the good news is that your future after bankruptcy is brighter than before it.
What Is An Exemption
The purpose behind bankruptcy is to eliminate your debt troubles by satisfying debt obligations to creditors. However, there are many instances in which you simply cannot afford to repay what you owe. While some of your debts may be resolved through the sale of personal property, the bankruptcy process is not designed to leave you with nothing. Bankruptcy exemption laws were created to protect much of your essential assets and personal property. There are two types of exemptions, federal and state; each offering a different range of asset protection.
Each state offers a different level of asset exemption for the value of property. In 2009, the state of Ohio made some important changes to their exemption laws to accommodate for the inflated cost of living. Previously one of the state’s lacking much in the way of asset protection, Ohio’s laws now are one of the states with exemption laws stronger than the federal exemption protection.
One of the most important exemptions sought after is the homestead exemption, which can protect the equity in your home. This year, Ohio’s homestead exemption value increased to $132,900. Compared to the $22,975 offered under the federal exemption, Ohio residents now have a better footing for defending foreclosure in bankruptcy.
Personal property protection was increased to $12,250, matching the current federal exemption value. The motor vehicle value allowance also matches the federal exemption level at $3,675, which was brought up from $3,225 in 2009. Many more of the current Ohio exemptions match or slightly exceed the federal level, a huge leap from years prior where Ohio’s values were well below the federal level. These include items such as tools of the trade, cash allowance, and the wildcard item. As usual items such as retirement, veteran, Social Security, insurance or other benefits funds are untouchable in bankruptcy.
The specific nature of the bankruptcy process, including exemption laws, is one reason why it is encouraged to seek guidance from a bankruptcy attorney. Only a professional can help you ensure your road to debt relief is a smooth process with minimal impact on your property or hard earned assets.
Rick West has experienced first hand the crushing nature that deb