It’s a difficult decision to decide to declare for bankruptcy. The stigma attached to bankruptcy, and the fear of losing everything, might discourage you from taking advantage of it to achieve fiscal freedom from overwhelming debts. Fortunately, the law has provisions in place to protect your family from complete destitution after bankruptcy.
Protection for your family
Ohio law protects those who decide to avail themselves of the bankruptcy process. Your bankruptcy will not leave you homeless and unable to feed your family. The bankruptcy exemption is an important piece of legislation that prevents creditors from taking what you need to survive and begin the next chapter of your life after your bankruptcy.
After you declare Chapter 7 bankruptcy, the court will direct the sale of your assets to pay your creditors. The exemption names certain assets – such as your home – that will be protected from a forced sale, even if the sale of your other debts still does not satisfy the full extent of your debts.
The types of assets that the exemption protects
The statute can extend to protect up to $125,000 of equity in your home, or a tract of land where your residence is located. You must use this exemption for your permanent residence – not for an investment property or other property.
There are also many different types of personal property that the exemption covers. For example, in addition to your house, you can also protect $3,225 of interest in your vehicle, $400 in money, $10,775 in household goods and other personal possessions, unemployment benefits, workers’ compensation benefits, a burial plot and more.
Bankruptcy can be a scary and stressful process. But it also represents a fresh start, and an opportunity to take control of your finances while protecting your family’s economic future.