In the state of Ohio personal bankruptcy laws are pretty similar to most other parts of the country. This is due in part to the fact that bankruptcies are governed by federal legislation before state law kicks in. But where federal law fails to address specific circumstances or needs, state law is used by bankruptcy courts to make decisions. In Ohio, like most other states, the biggest differences in the bankruptcy laws have to do with determining exemptions.
When you file a bankruptcy petition in federal court you must list all of your income and assets. This is true regardless of whether you're filing for liquidation protection or reorganization. The bankruptcy court wants to see this information so it can determine the best method for proceeding with your case. It is the responsibility of the court to determine how your bankruptcy filing will best benefit your creditors. In order to do that, they must know what your assets and income are.
Exemptions come into play when a court determines what assets can and cannot be used to satisfy creditors. Assets that cannot be used are considered "exempt" and remain the property of the debtor. Under federal law, the general guidelines for exemptions include a home used for your primary residence, a vehicle used to drive to and from work, and any property jointly owned by the debtor and other parties not involved in the bankruptcy.
Ohio Exemptions
Ohio is a bit more liberal in its exemption policy than some other states. For example, some states exempt personal property only up to a total value of $1,000. In Ohio the total is $1,500. Not only that, you can add to that total your cooking and refrigeration equipment up to $300, jewelry up to $200, some cash monies up to $400, burial plots, and clothing and bedding up to $200 per item. These separate exemptions do not count toward your $1,500 limit with the exception of jewelry.
When it comes to pensions in Ohio, they are also a bit more liberal there as well. Ohio protects the pensions belonging to police officers, firefighters, dependents of volunteer firefighters, public school teachers, and various state and county public employees. By contrast, some states limit pension protection to just a small number of public employees. Furthermore, IRAs, Keogh accounts, and ERISA accounts needed for your own support are also exempted.
The Means Tests
Legislation passed by the federal government in 2005 requires that all individuals filing for personal bankruptcy undergo what is known as the Means Test. That means a federal judge will examine all aspects of the bankruptcy petition to decide whether or not individuals should file under Chapter 7 or Chapter 13.
Chapter 7 bankruptcy involves the liquidation of all qualifying assets with the funds to be disbursed by the trustee among the various creditors involved. Chapter 13 bankruptcy is an organization plan in which the debtor retains ownership of all his assets while making regular payments 3 to 5 years in the future to satisfy creditors.
As pertaining to the Means Test, the bankruptcy judge will need to determine whether or not the individual has sufficient disposable income to file under Chapter 13. If not, the individual will probably be forced into Chapter 7. Regardless of what the court determines, they are most interested in ensuring that your creditors get paid as much as possible.
Ohio District Courts
Since bankruptcy is the domain of the federal government all petitions are filed in U.S. bankruptcy court. In the state of Ohio there are only two districts, the Northern and the Southern. Every Ohio County falls within one of these two districts based on geographic location. Within them there are several local courts where you can file your bankruptcy petition. Just be sure that you choose the correct court as designated by the court clerk in your region. You will have to either file within the district where you live or the district where you conduct most of your business.
Ohio Debt Consolidation and Credit Counseling
Federal bankruptcy courts go out of their way to ensure the bankruptcy petition is the last option to individual debtors. To that end, the federal government passed additional legislation in 2005 requiring all individuals to undergo consumer credit counseling before filing a bankruptcy petition. The point of the counseling is to determine whether or not there are other options available, as well as teaching individuals how to regain control of their finances.
In the state of Ohio you have another alternative - debt consolidation loans. Ohio law provides for low-cost debt consolidation loans to pay off creditors’ en mass and reduce the amount of monthly income you must dedicate to debt repayment. The US District Court will inquire as to whether or not Ohio residents have exercised these two options before filing a petition. If not, both must be attempted before the proceeding can continue.