Change In Exemption Statute Alows Debtors To Keep More Property In Bankruptcy
Among the most important issues to consider when filing a consumer bankruptcy are the exemption laws. Exemption laws are federal and state laws which set forth what property a person can keep when he or she files bankruptcy. If the bankrupt party owns property in excess of the property set forth in the exemption laws then, in theory, the excess property must be turned-over to the bankruptcy court to be sold and the proceeds distributed to creditors.
Each state chooses whether it wants to allow its citizens to use the federal bankruptcy exemption laws or whether the state wants to opt-out of the federal laws and adopt its own. Ohio is an opt?out state. Prior to 2007, Ohio had among the worst exemption laws in the country. People living in Ohio had to turn over more property when they filed bankruptcy than most other people in the country. In 2007, however, Richard Nemeth spearheaded an effort to cause the Ohio legislature to adopt a more generous exemption scheme. That effort was wildly successful and Ohio now one of more generous states.
The current statute also provides that the exemption amounts are to be adjusted every 3 years with the cost of living. On April 1, 2019, the Ohio exemptions increased again. The current amounts are shown in the right-hand column below.
|Type of property||Statutory amount before 4/1/2010||Revised amount 4/1/2010 – 3/31/2013||Revised amount 4/1/2013 – 3/31/2016||Revised amount 4/1/2016 – 3/31/2019||Current amount 4/1/2019 – 3/31/2022|
$125,000 [as of 3/27/2013]
|Household items – per item||$525||$550||$575||$600||$625|
|Houshold items – total||$10,775||$11,525||$12,250||$12,625||$13,400|
|Tools of trade, professional books||$2025||$2,175||$2,325||$2,400||$2,550|
|Bodily injury awards||$20,200||$21,625||$23,000||$23,700||$25,175|
|Wildcard (any property chosen)||$1,075||$1,150||$1,225||$1,250||$1,325|
As a practical matter, bankruptcy filers are often able to retain substantially more than provided in the exemption statute. If you’re thinking about filing bankruptcy, contact our firm and talk with Mr. Nemeth or another attorney about whether any of your assets are at risk.