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Can I keep my house and other property after Chapter 7?

Ohio law allows Chapter 7 filers to exempt certain property from bankruptcy proceedings, on the theory that debtors would not be able to take full advantage of a fresh financial start if they had to give up everything during the process. Bankruptcy is based on federal law, but filers may rely on exemptions established by the state in which the case is filed.

In Ohio, the petitioner can usually keep his or her home after Chapter 7 if it is worth less than the amount owed on the mortgage and the mortgage is current. If there is no mortgage on the home, the petitioner can rely on the homestead exemption to protect the home if its value is $132,000 or less. A husband and wife filing jointly can claim twice the exemption. Additionally, the debtors can usually keep the home if their equity is less than the amount of the applicable homestead exemption, even if the house is worth more than the outstanding mortgage.

The facts of the case will impact the applicability and amount of the homestead exemption. For example, it applies only if the filer or a dependent of the filer actually lives in the home. Additionally, the exemption may be limited to $21,265 for claims that arose before March 27, 2013, because of a change in the law that took effect on that date.

Chapter 7 bankruptcy filers may also exempt up to $450 in cash along with household goods totaling up to $12,250, with the restriction that no single exempted household item can have a value greater than $575. Other exemptions may apply to other property. The foregoing discussion should not be construed as legal advice, and a bankruptcy attorney can explain what exemptions are available in a particular case.

Source: "Ohio Law Allows Property Exemptions in Bankruptcy," Ohio State Bar Association, Sep. 27, 2014

Source: Ohio State Bar Association, "Ohio Law Allows Property Exemptions in Bankruptcy", September 26, 2014

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