What Are the Ohio Bankruptcy Exemptions?

Why Ohio Bankruptcy Exemptions Are Important in Chapter 7 Bankruptcy

The Bankruptcy Code is a federal law that governs bankruptcy cases across the U.S. But some states make their own exemption laws. Federal and state bankruptcy exemptions do the same thing: They protect debtors who file bankruptcy from losing all their possessions. Simply put, these laws determine the property you can protect from your creditors.

When you file Chapter 7 bankruptcy in Ohio, the court will appoint a bankruptcy trustee to your case. The trustee has the authority to sell your non-exempt assets and use the proceeds to pay your creditors. But if you’re like the majority of Chapter 7 filers, many or all of your assets will be exempt. The trustee can’t sell your exempt assets. 

Who Can Use the Ohio Bankruptcy Exemptions?

If you’ve lived in Ohio for at least two years, you must use the Ohio bankruptcy exemptions. You can’t use federal exemptions. However, one advantage of using state bankruptcy exemptions is that you can also utilize the federal non-bankruptcy exemptions. These federal exemptions protect certain qualifying property, including:

• Social Security benefits

• Veterans' benefits

• Federal and military retirement benefits

• Other federally protected benefits

Does Ohio Allow People To Use Federal Bankruptcy Exemptions?

Some states allow people to choose between federal bankruptcy exemptions and state exemptions, but not Ohio. 

Ohio has its own bankruptcy exemptions. If you’ve lived in Ohio for at least two years, you must use the Ohio bankruptcy exemptions instead of the federal exemptions. This two-year requirement was established to prevent people from moving to another state to take advantage of better bankruptcy exemptions.

What Are the Ohio Bankruptcy Exemptions?

When you file your bankruptcy case, you agree to let the Ohio bankruptcy court take temporary control of your assets. Your belongings then become part of what’s called your bankruptcy estate, which includes everything you own. Your possessions are split into two groups: exempt property and non-exempt property.

Exempt property is what you're allowed to keep, such as your home, up to a certain value, or personal items. Non-exempt property includes items that don’t fall under these protections and might have to be sold to pay your creditors.

If all your belongings are exempt, your unsecured debts (like credit card bills or medical bills, which are not tied to any specific physical item of collateral) will be wiped out (discharged), and you won't lose any possessions. However, if you have non-exempt items, the bankruptcy trustee (the person managing your bankruptcy case) can sell these items to help pay off your unsecured debts. The majority of Chapter 7 filers get to keep all of their property. It’s rare for filers to lose property during a Chapter 7 bankruptcy case.

Let’s look more closely at the three main categories of exemptions: real property, personal property, and money benefits.

Real Property: The Ohio Homestead Exemption

If you’re a homeowner, you’re probably most concerned about whether you can keep your home if you file Chapter 7 bankruptcy. Luckily, Ohio’s homestead exemption is quite generous. It allows you to protect up to $161,375 of equity in real property you use as a primary residence. For married couples who file jointly, this can extend to an amount of $322,750 in protected equity. 

Real property means your home and the land it sits on. Your primary residence is the main home you live in. Investment property isn’t protected by this exemption.

It’s important to understand that this exemption is based on the equity you have in the home. To calculate your equity, subtract how much you owe on the mortgage from the current value of the house.  For example, let’s say you own a home in Cleveland worth $460,000, and you owe $350,000 on the mortgage. This means you have $110,000 of equity in your home. Since this is less than Ohio's homestead exemption limit of $161,375, your equity is fully protected, and you can keep your house.

This exemption is readjusted every year to account for inflation. 

See Ohio Rev. Code Ann. § 2329.66(A)(1)(a)

Personal Property Exemptions

Personal property is essentially anything you own that can be moved. Personal property exemptions cover everything from your car to household goods to health aids. Some of Ohio’s personal property exemptions apply to a combination of assets up to a certain total amount. Others apply only to specific items, like jewelry and household goods. 

Here are some of the most common personal property exemptions that bankruptcy filers use in Ohio. Remember, married couples who file jointly are allowed to double these exemption amounts.

Ohio Motor Vehicle Exemption

Having a car to get to work, shuttle your family around, and run errands is very important. So it’s understandable if you’re worried about having to give up your car if you file Chapter 7. Ohio’s bankruptcy exemption protects up to $4,450 of equity in your motor vehicle. Again, equity is the market value of your car minus what you owe on the car loan.

So if you own a vehicle worth $10,000, and you have $6,550 outstanding on your car loan, you have $3,450 in equity. In this case, your car would be protected under Ohio law. 

On the other hand, if you owned the vehicle outright, you’d have $5,550 of non-exempt equity in the car, and your trustee could sell it, give you the exemption amount, and use the rest to pay off your creditors.

See Ohio Rev. Code Ann. § 2329.66(A)(2)

Other Personal Property 

Personal property includes furniture, electronics, art, and much more. You can protect the following personal property: 

See Ohio Rev. Code Ann. § 2329.66

Wildcard Exemption

The wildcard exemption in bankruptcy allows you to protect any property of your choosing of up to $1,475 if you’re filing as an individual. You can use this exemption to protect assets that aren’t specifically named in Ohio state law, or you can add this amount to an existing personal property exemption to increase the amount.

See Ohio Rev. Code § 2329.66(A)(18)

Money Benefits

In addition to real and personal property, you may have money in a retirement account, receive public benefits, or be entitled to insurance proceeds. Here’s how each is protected by exemptions in Ohio.

Alimony and Child Support Exemption

Child support and alimony are exempt in Ohio to the extent that these payments are reasonably necessary for the ongoing support of the bankruptcy filer and their dependents. 

See Ohio Rev. Code § 2329.66(A)(11)

Pension Exemption

As part of federal non-bankruptcy exemptions, you can protect tax-exempt retirement accounts, such as 401(k)s, 403(b)s, money purchase and profit-sharing plans, SIMPLE IRAs, SEP, and defined benefit plans. Public employees’, police officers', and firefighters' pensions or annuities are fully protected under federal law. Benefits for dependents of volunteer firefighters are fully protected under federal law. Death benefits of public safety officers, including ERISA-qualified benefits, Roth IRAs, IRAs, and Keoghs that are needed for support, are fully protected under federal law.

For Ohio residents, Ohio Revised Code § 2329.66(A)(10)(a) outlines specific state exemptions for pensions and retirement plans, ensuring that certain retirement benefits are exempt from creditors in bankruptcy cases within Ohio.

The rule of thumb is that any pension that’s covered by federal tax exemptions is typically considered fully exempt under bankruptcy law.

Public Benefit Exemptions

Ohio exemptions fully protect many public benefits, including:

• Child tax credits and earned income tax credits

• Vocational rehabilitation benefits 

• Disability assistance

• Workers' compensation benefits

• Unemployment compensation

• Public assistance crime victim’s compensation

See Ohio Rev. Code § § 2329.66(A)(9)(g), 2329.66(A)(9)(b), 2329.66(A)(10)(c), 4123.67, 4141.32, 2329.66(A)(9)(d), 2329.66(A)(9)(f)

Insurance

Ohio Revised Code provides several exemptions for insurance, including:

• Up to $5,000 of benevolent society benefits

• Group life insurance proceeds or policy (fully protected)

• Fraternal benefit society benefits (fully protected)

• Disability benefits necessary for support

• Life insurance proceeds for your spouse if necessary for support

See Ohio Rev. Code § § 2329.63, 2329.66(A)(6)(a), 2329.66(A)(6)(c), 2329.66(A)(6)(d), 2329.66(A)(6)(e), 2329.66(A)(10)(b), 3921.18

Need Help Filing Chapter 7 Bankruptcy? 

If you’re overwhelmed by credit card debt, medical bills, or other unsecured debts, Chapter 7 may bring the debt relief you need. If you decide to file Chapter 7 and your case is straightforward — meaning you don’t own a home or other expensive property — Upsolve may be able to help. You can take our two-minute screener to see if you qualify to use our free filing tool. If you’d like to talk to an experienced bankruptcy attorney, you can schedule a free consultation to talk more about your case and how to protect your property.