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How much equity can you protect in an Ohio Chapter 7 filing?

Bankruptcy can be a way for struggling adults to correct financial issues and reduce the overall amount of debt that they need to repay. Each different form of bankruptcy brings with it unique challenges and benefits. Chapter 7 bankruptcy, which has limitations in place for both the total value of your assets and your income, is also sometimes called liquidation bankruptcy.

That is because the courts have the authority to liquidate (or seize and sell) certain assets to repay your creditors prior to your discharge. For that reason, many homeowners in Ohio choose not to file Chapter 7 bankruptcy. However, while there are limits to the exemptions available, you do have the right to exempt certain personal property from liquidation in a Chapter 7 bankruptcy.

If you have an unmanageable amount of unsecured debt and your income is at a certain level, you may qualify for Chapter 7 bankruptcy. Depending on how much equity you have in your home, Chapter 7 proceedings could be the best option available.

Ohio has a specific limit on home equity

The cost of living and standard of living differs throughout the country. As such, the federal government has certain standard exemptions in place, but every state also has the ability to set their own. 

Those filing for bankruptcy in Kentucky, for example, have the option to choose either state or federal exemptions, in most cases. In Ohio, however, federal exemptions are not available in most cases. 

For an Ohio house or parcel of real property that serves as your primary residence, you can exempt up to $145,425 in home equity from liquidation. That could represent nearly the full value of your home, depending on the value of your home.

Bankruptcy can free up more income to pay your mortgage

If you have medical debt or major credit card balances, you may find yourself struggling to make minimum payments every month with little hope of light at the end of the proverbial tunnel. Chapter 7 bankruptcy can help you free up more of your monthly income to go toward your mortgage and other standard costs of living expenses instead of paying off interest in fees on your various debts.

Not only can you get rid of some of your debt burden, but you can retain the equity that you have worked so hard to build in your home.  The law firm of Minnillo & Jenkins can help you determine whether the equity in your home is exempt and how to protect it if it's not.

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