Ohio Bankruptcy FAQ: Protecting Your Assets During Chapter 7 and Chapter 13

Answer: Eligibility for Chapter 7 depends primarily on your income and financial situation. You must pass the Means Test, which compares your income to the median for your household size in Ohio. If you qualify, Chapter 7 can wipe out most unsecured debts in as little as four months. The attorney at Fesenmyer Law Offices will evaluate your income, debts, and assets to determine if you qualify and explain your options.

Answer: In most cases, no. Ohio law allows you to use the homestead exemption to protect up to a certain amount of your home, and you can also keep a car with reasonable equity. Fesenmyer Law Offices carefully applies all exemptions to help you protect your most important assets while eliminating debt.

In most cases, yes. Ohio’s Homestead Exemption allows you to protect a significant amount of equity in your primary residence.  If the equity in your home (the market value minus what you still owe) is less than the exemption amount, you will typically keep your home, provided you remain current on your mortgage payments.

Chapter 7 bankruptcy will stop a foreclosure sale through the Automatic Stay, but it only offers a temporary delay. To permanently save your home if you are behind on payments, you must file Chapter 13 bankruptcy. Chapter 13 allows you to use a 3-to-5-year repayment plan to catch up on all missed mortgage payments while keeping your home and preventing foreclosure.

Yes. Ohio law provides a generous exemption to cover necessary household furnishings, appliances, and goods (like clothing, electronics, bedding, and kitchenware). These items are valued at their “garage sale” or resale value, not the original purchase price. Most clients are able to keep 100% of their personal belongings.

Yes, in most cases. Ohio has a specific Motor Vehicle Exemption that allows you to protect a certain amount of equity in one motor vehicle. If your car is worth less than the exemption amount, you can keep it. If you have more equity than the exemption covers, we can often still protect the vehicle through a Chapter 13 repayment plan or by applying other “wildcard” exemptions.

If you are current on your car loan and want to keep the car, you generally have three options:

1. Reaffirmation: Signing a new agreement with the lender to continue paying the debt as before.
2. Redemption: Paying the lender the fair market value of the car in a lump sum (often done through a new loan).
3. Chapter 13: If you owe more than the car is worth, Chapter 13 may allow you to reduce the loan balance to the car’s market value, a process called a “cramdown.”

Yes, federal law offers excellent protection for most retirement assets. Funds held in qualified plans, such as 401(k)s, IRAs, 403(b)s, and pensions, are generally exempt and safe from creditors in both Chapter 7 and Chapter 13.

Wages you have already earned but not yet been paid (like money your employer owes you) are partially protected by the Ohio wage exemption. Crucially, all wages you earn after the date you file for bankruptcy are fully protected and are yours to keep without being affected by the filing.

Yes, but this is an area that requires careful planning. Funds in your checking or savings accounts must be covered by available exemptions. We typically use the Ohio “Wildcard” Exemption and the Cash On Hand Exemption to protect cash in bank accounts.

Yes. Ohio law includes an exemption for tools of the trade. This protects the tools, books, computers, and equipment necessary for you to earn a living, up to a certain dollar limit. This is especially vital for entrepreneurs, mechanics, tradespeople, and creative professionals.

The portion of your tax refund that was earned before the filing date is considered an asset of the bankruptcy estate and must be covered by exemptions. We carefully calculate the exempt portion of your refund to minimize the amount you would have to surrender to the trustee.

Your security deposit is generally considered an asset, but it is typically a smaller amount that can be easily covered by the Ohio “Wildcard” Exemption. This allows you to keep the full deposit when you move out.

The “Wildcard” Exemption is one of the most useful tools available under Ohio law. It is a specific dollar amount that can be applied to any personal property you own that isn’t covered by other specific exemptions (like an old bank account balance, non-essential furniture, or a tax refund). We use this strategically to cover any small gaps in your asset protection plan.