Are you worried about losing all your money when you file for bankruptcy? Many assume they’ll walk away with nothing, but this isn’t always the case.

As experienced foreclosure lawyers in Ohio, our team at Cozmyk Law helps people navigate this legal process regularly. Learn more about your options for keeping cash when filing for bankruptcy here.

Cash Exemption for Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a legal process known as a “liquidation” bankruptcy that gives individuals a fresh financial start by legally wiping out most unsecured debts. The moment you file, a powerful court order called an “automatic stay” immediately halts all creditor collections, foreclosures, and wage garnishments.

A court-appointed trustee then reviews your assets, but robust state or federal bankruptcy exemptions allow you to shield essential property. When it comes to cash, you can keep up to $625 in your bank account or on hand. You can also apply for a “wildcard” exemption, which allows filers to exempt up to $1,675 for any chosen property.

What Are Other Kinds of Exempt Property?

Aside from keeping cash when filing for bankruptcy, you can also retain the following items with a maximum exempted value under Ohio law:

• Your homestead (up to $182,625)
• Household items that cost no more than $800 (up to $16,850)
• Your car (up to $5,025)
• Jewelry (up to $2,125)
• Work-related tools (up to $3,200)
• Filed personal injury claim (up to $31,650)
• Certain life insurance policies, burial plots/insurance, workers’ compensation, unemployment, and most forms of retirement (completely exempt)

A married couple filing for bankruptcy can double the limits if they’re both eligible. The court also uses the fair market value minus valid liens for all these Ohio bankruptcy exemptions.

What About Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a court-sanctioned reorganization plan that allows individuals with a steady income to bundle their debts into a three-to-five-year repayment plan managed by a trustee.

On paper, there is no difference in the baseline dollar thresholds for cash exemptions between Chapter 7 and Chapter 13 in Ohio. Filers can protect up to $625 in cash on hand or in a bank account, and they can stack that with Ohio’s $1,675 wildcard exemption to shield a combined total of up to $2,300 in liquid cash.

Operationally, however, the real-world treatment of any cash exceeding this $2,300 limit diverges by chapter. In Chapter 7, the trustee may liquidate nonexempt cash and use it to repay creditors. In Chapter 13, you generally keep your cash and other property, but having nonexempt cash can affect your repayment plan. The value of nonexempt assets is one factor the court may consider when determining how much unsecured creditors must receive.

Professional Bankruptcy Lawyers in Ohio

Keeping cash when filing for bankruptcy can help provide a financial cushion to cover basic, non-dischargeable daily living expenses like food, rent, and medical care. If you have more questions about bankruptcy exemptions and nonexempt assets or need help navigating the legal process, our team at Cozmyk Law is here to guide you.

Call us at (216) 452-9145 today.