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July 15, 2014
Need To Learn More About The Means Test?

Chapter 7 Bankruptcy in Ohio


It may be a Midwestern state, but there is nothing ordinary about Ohio or its residents. It is the birthplace of many notable people ranging from presidents to actresses and everything in between. Astronaut, Neil Armstrong was born there, along with inventor, Thomas Edison and journalist, Ambrose Bierce. And while there are many notable people that come from Ohio, other residents, those working from day to day to provide for their families are no less great or important.

Sometimes though, individuals in Ohio may feel un-important or even less-worthy as a person when debts pile up around them. Creditors calling or knocking on your door at any time, a threat of vehicle repossession, or a judgment placed against your home can make you, just like other Ohioans, unhappy and unsettled.

Fortunately for those who have financial troubles, there is a way to pay off debts and start over again. A Chapter 7 bankruptcy  is a way to get rid of those debts, free yourself from stress, and turn a harried, worried life into one that is carefree and pleasant.

Filing for Chapter 7 Bankruptcy in Ohio 

Also known as a “straight” or “liquid” bankruptcy, Chapter 7 provides certain benefits, and has certain restrictions. If you qualify for Chapter 7 bankruptcy, you can expect:

  • Nearly all secured and unsecured debts discharged
  • Garnishments or frozen accounts lifted
  • No pressure or harassment from creditors or lenders
  • A halt in the foreclosure or short sale process

Bankruptcy does have its drawbacks too. Myth and hype surround bankruptcy making it look like an option that will hurt debtors more than they help. Your bankruptcy attorney will outline the specific benefits and drawback of a bankruptcy, but in general, a Chapter 7 bankruptcy will:

  • Stay on a debtor’s credit report for 10 years
  • Initially lower a credit report
  • Not discharge all debts (alimony, child support, school loans, and other similar debts are non-dischargeable.)

These items may only seem like a minor hindrance to many Ohio residents who are struggling with massive amount of credit, medical or even old tax debt. If you feel oppressed by all the debt you have, it may be time to talk to a bankruptcy attorney about filing for Chapter 7.

You Still Need to Qualify

After making the decision to file for bankruptcy, your attorney will tell you that there is a qualification process in order to file for Chapter 7 bankruptcy. As of 2005, the Bankruptcy Reform Act put certain laws into place that each debtor filing must fall at or below the median income level for the state they reside in. The current income level for Ohio is based on family size. These levels include:

  • Single individual filing: $40,749
  • Family of two: $51,319
  • Family of three: $60, 247
  • Family of four: $72,625
  • More than four family members: Those interested in filing must add $7,500 to the base income level for each additional family member.

These income levels change to reflect inflation and other economical differences. Talk your bankruptcy attorney for the most current median income levels for the state you reside in.

If you don’t qualify based on your income (you exceed the income levels) there is one other way to qualify for bankruptcy, Chapter 7 or otherwise. The means test is a mathematical process that uses the figures of your assets and debts, and determines if bankruptcy would be in yours or your family’s best interest. A local bankruptcy attorney can tell you if you qualify by using the means test. You may be asked to bring the following information:

  • Last year’s filed tax return
  • A complete list of your creditors (including contact and address information)
  • The last six months of your pay stubs
  • Information regarding liens, judgments, or garnishments

If you don’t qualify for a Chapter 7 bankruptcy, you may be able to file for a Chapter 13 bankruptcy. Also known as debt reorganization, this type of bankruptcy filing will allow you to discharge some of your debts, while putting the rest on a discounted payment plan.

Keep Your Home, Dump the Debt

Another common misconception about bankruptcy is that you will lose everything you ever owned in an effort to get rid of your bad debt. Congress recognizes that people need property and some assets in order to start a life over after bankruptcy without becoming completely destitute. Exemption laws have been put in place for each state in the U.S., allowing debtors to withhold a certain amount of assets from a Chapter 7 bankruptcy filing. While some states have options to use both federal and state exemptions, Ohio only allows its residents to use the state exemption laws.

These exemptions include:

  • Home exemption: Up to $21,625 in value for a primary residence.
  • Personal property exemptions:
    • Cash on hand: $400
    • One automobile: $3,450
    • Jewelry: $1,450
    • Household items: A group limit of $11,525 of all of the following (each category may not exceed $550 in value)
    • Clothing
    • Books
    • Animals
    • Crops
    • Furniture
    • Fishing equipment
    • Appliances
  • Insurance and other benefits:
    • 100% old age and survivor’s insurance benefits
    • 100% volunteer firefighter’s benefits
    • 100% Fraternal Benefits Society benefits
    • 100% group life insurance policies
    • 100% worker’s compensation
    • 100% unemployment compensation
    • 100% vocational rehabilitation
    • Up to $600 in sickness and accident insurance benefits
    • Up to $5,000 in death benefits paid by a society or association to family of a deceased family member
  • Pensions or retirement benefits for all:
    • Public employees
    • Teachers
    • State highway patrol officers
    • Policemen
    • Firemen
  • Additional exemptions:
    • 100% of tuition credits and credit contract payments
    • $1,150 wild card property exemption
    • 100% in benefits under all policies of sickness and accident insurance for dependents of debtor

Additional exemptions may be available. Although the exemption amounts can change annually, your bankruptcy attorney can help you include the right ones based on your financial information.

Wiping your financial slate clean means you can get a fresh start in life. Creditors, old bills and financial difficulties do not need to define your life. File for Chapter 7 bankruptcy today, and become the notable person you always dreamed.

Ohio Bankruptcy Courts

John F. Seiberling Federal Building
and United States Courthouse
Two Main Street
Akron, Ohio 44308
Phone: (330) 252-6100

Ralph Regula Federal Building
and United States Courthouse
401 McKinley Avenue, SW
Canton, Ohio 44702-1745
Phone: (330) 458-2120

Sixth Circuit Bankruptcy Appellate Panel
Potter Stewart United States Courthouse
100 East Fifth Street
Cincinnati, Ohio 45202
Phone: (513) 564-7000

Atrium Two
221 East Fourth Street, Suite 800
Cincinnati, Ohio 45202
Phone: (513) 684-2572

Howard M. Metzenbaum United States Courthouse
201 Superior Avenue
Cleveland, Ohio 441114
Phone: (215) 615-4300

Schaaf Building
170 North High Street
Columbus, Ohio 43115
Phone: (614) 469-6638

Old Post Office Building
120 West Third Street
Dayton, Ohio 45402
Phone: (937) 225-2516

James M. Ashley and Thomas W.L. Ashley
United States Courthouse
1716 Spielbusch Avenue
Toledo, Ohio 43604
Phone: (419) 213-5600

Nathanel R. Jones Federal Building
and United States Courthouse
10 East Commerce Street
Youngstown, Ohio 44503
Phone: (330) 746-7027