Can I file for Bankruptcy and Keep My Home and Car in Ohio?
The decision to file for bankruptcy protection in Ohio is not something to enter into lightly. Understanding the differences between a Chapter 7 and a Chapter 13 bankruptcy action, along with the outcome of each scenario is very important. One question that many people have is whether they can keep their homes and cars even if they file for a Chapter 7. In many instances, it is possible to do so.
Bankruptcy and Exemptions
Depending on the debtor’s circumstances, there is a chance that the primary residence and the vehicle involved will be considered exempt. What this means is that according to current Ohio laws, those assets cannot be considered eligible for seizure and sale as a means of partially settling the debts that the filer owes. The trustee assigned to the case will evaluate the value of those assets along with current values and any amount that is still outstanding on the loans associated with those assets.
In the case of a private residence home, it may be possible to retain control of the property, if the debtor is willing to continue making the monthly mortgage payments on time. This is particularly true if the debtor has a reasonable amount of equity in the property. The same general approach holds true for the automobile that the debtor uses as his or her primary means of transportation.
Any real estate or additional vehicles that the court does not deem as being exempt could be sold at auction, and those funds used to partially settle the debts owed to creditors.
The purpose of bankruptcy is not to create additional hardship for the debtor. At the same time, the use of this type of legal relief from debt is not intended to prevent creditors from receiving at least something on the amounts owed. This means that the court bears the responsibility to uphold current laws and make sure that both sides are treated as equitably as possible.
As this relates to a home and a car, the court will consider the issue of need. If seizing those assets would make it more difficult for the debtor to retain his or her job, or create a situation in which the debtor would be unable to find affordable shelter, then there is a good chance those assets will be considered exempt. Any holdings that are not considered necessary for the maintenance of a reasonable standard of living are likely to be sold and those funds distributed between all creditors involved.
Seeking Legal Advice
Since no two situations are exactly the same, the best move is to consult with a bankruptcy attorney who is well-versed in Ohio law. The attorney can look over the specifics of the debtor’s situation, including all assets that could be converted to cash, the amount of monthly income the debtor produces, and the type of secured and unsecured debt involved in the possible filing. From there, it will be easier to determine what the court is most likely to do and then determine if bankruptcy is really the most practical way to proceed.