Assets During Bankruptcy
One of the biggest questions asked about bankruptcy is: “what will happen to my assets?” The fate of your assets will depend on what type of bankruptcy you file as well as your current financial situation. Each type of bankruptcy, whether it’s Chapter 7 or Chapter 13, has different exemptions that allow you to keep certain property and preventing it from becoming part of the bankruptcy estate. Understanding which exemptions applies to you will give you an enormous advantage in your bankruptcy case.
If you are filing for bankruptcy and want to take full advantage of your bankruptcy exemptions, then get in contact with an experienced Cincinnati bankruptcy attorney as soon as possible. An attorney will have extensive knowledge of bankruptcy laws and can work ahead to ensure you keep as many assets as possible. That way you can leave the bankruptcy courtroom knowing you made the best financial decision for your future.
Cincinnati Debt Relief Attorney in Ohio
Are you drowning under massive amounts of debt? Have you been considering filing for bankruptcy? If so, then you may want to get in contact with the dedicated Ohio debt collection attorney Eric Steiden at Steiden Law Offices. Attorney Steiden has over 26 years of experience and has helped numerous people surface from unsustainable debt and into financial freedom. He can analyze your case and determine what the best legal option is for you and your financial health.
Set up your first consultation with Eric Steiden by contacting Steiden Law Offices at [phone].
Eric Steiden and his team proudly represents individuals throughout Kenton County, Boone County, Campbell County, Gallatin County, Grant County, Pendleton County, Bracken County, Robertson County, Mason County, in Kentucky, along with those who reside in Hamilton County, Butler County, Clermont County, Warren County, Clinton County, Montgomery County, Greene County, Preble County, Darke County, Highlands County, Miami County, Shelby County, Champaign County, Clark County, Brown County, Adams County, Lawrence County, and Scioto County, Ohio.
- Where Do My Assets Go During Bankruptcy?
- What Assets Are Exempt from Creditors?
- Additional Resources
Where Do My Assets Go During Bankruptcy?
When you file for bankruptcy, an automatic stay goes into effect that prevents creditors from attempting to collect debts until bankruptcy proceedings have concluded. While this is great news, it means the court will begin liquidating your assets to start paying off your debts. What’s considered a non-exempt asset is determined by a trustee who manages a separate legal entity known as a bankruptcy estate.
All non-exempt assets you own at the time of the filing will become a part of the bankruptcy estate. They are then liquidated or put towards your debt. How a trustee determines what’s a non-exempt or exempt asset is depends on the type of bankruptcy you’re filing.
In a Chapter 7 case, the trustee’s role is to sell off non-exempt property, this is known as liquidation. The proceeds are then distributed to pay off your creditors. For Chapter 13 bankruptcy cases, the debtor must propose a debt management plan. The plan allows them to keep certain types of property, such as a house or car, while they make payments from a current income. The trustee then administers those payments and monitors the debtor’s performance under the repayment plan.
What Assets Are Exempt from Creditors?
Ohio and Kentucky bankruptcy laws allow people to protect their property from being made available to creditors. The reason for exemptions is the thought that debtors need to retain a certain amount of assets so they can emerge from bankruptcy with a fresh financial start.
Ohio has opted out of the federal exemption system, so the only exemptions available to Ohio residents is under state law. Listed below are some commonly utilized bankruptcy exemptions by debtors in the state of Ohio.
- Worker’s Compensation
- Motor vehicle – Up to $3,775
- Jewelry – Up to $1,600
- Life insurance policies in which your spouse or children are beneficiaries
- Cash-on-hand – Up to $475
- Household goods – Up to $600 per individual item, total of $12,625
- Retirement plans such as an IRA or 401k
- Homestead (personal residence) – Up to $136,925
In Kentucky, you do have a choice between federal exemptions and state law exemptions. However, you must choose one set of laws and you can’t mix and match exemptions. Federal exemptions include personal property exemptions such as up to $4,000 for your motor vehicle or $1,700 for jewelry. It also includes other types of exemptions such as spousal support, life insurance payments, monetary awards for personal injury, compensation from being a crime victim, protections for retirement accounts, or Social Security benefits to name a few.
Listed below are some common exemptions under Kentucky law.
- Household furnishing and clothing – Up to $3,000
- Property used as a permanent resident – Up to $5,000
- Tools, equipment and livestock for farming – Up to $3,000
- 1 Motor vehicle with accessories and 1 spare tire - Up to $2,500
- Personal injury award – Up to $7,500
- Worker’s compensation
- Unemployment compensation
- Pension and retirement accounts
Federal Bankruptcy Exemptions – Access the Legal information Institute run by Cornell Law School to read the U.S. Code regarding bankruptcy exemptions. Access the site to learn more about the exemptions found under federal law, what isn’t exempt and other relevant information.
Bankruptcy Basics – Visit the official website for the U.S. Courts to learn the basics of bankruptcy law. Access the site to learn what divides Chapter 7 and Chapter 13 bankruptcy, exemptions under each and gain access to important bankruptcy forms you may need.
Ohio Bankruptcy Attorney for Asset Protection in Cincinnati
If you have been struggling with debt, it might be time to consider bankruptcy. Bankruptcy offers debtors a brand-new start and a plan to tackle their missed payments. Although it carries a negative stigma, bankruptcy offers hope to people struggling every day by giving them the tools they need to be financially successful. To find out if bankruptcy is the best option for you, contact Steiden Law Offices at [phone].
Eric Steiden of Steiden Law Offices has amassed over 26 years of experience. He cares immensely for each and every client by ensuring they receive the best legal service available. With Steiden Law Offices, you can rest assured that every angle and route of your case will be analyzed. Eric Steiden will work tirelessly to ensure your bankruptcy proceedings end with the best possible outcome. Call [phone] to set up your first consultation. Eric Steiden and his team proudly represents individuals throughout Kenton County and Boone County in Kentucky, along with those in Hamilton County, Ohio.