What Debts Are Not Dischargeable In Bankruptcy Cases?

What Can Be Discharged?

Discharged debts can include credit card debt, unpaid medical bills, and personal loans. You can also discharge utility bills, past-due rent, and business debts. Debts that can be discharged in bankruptcy are based on a federal level, not on a state level. If you want to learn more about what debts can be discharged in bankruptcy, give Jump Legal a call today to find what you can discharge.

Debts On A State Level

The above list of non-dischargeable debts is the same across all states, but some states have specific rules in addition to the federally regulated laws. In Ohio, state income or municipal taxes are usually non-dischargeable if they are newer. The debtor may be able to get them discharged if they meet a specific age or fall under certain filing requirements.

Impacts Of Bad Behavior In Bankruptcy

Bad behavior or acts of fraud can become a bigger issue in some bankruptcy cases and can affect what debts can be discharged. If a creditor believes the debtor filing for bankruptcy intended to cause harm, commit deception, or engage in embezzlement, they can challenge the discharge of other debts. If they make these accusations, they must prove those debts are from bad behavior. This proof can come from the debtor lying on a loan application, hiding assets, and even deliberately causing injury to someone. These findings will be presented to a bankruptcy court, and a verdict will be made if they are able to be discharged or if the debtor will still owe them even after bankruptcy.

Chapter 7 VS 13 Bankruptcy

There are many differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. The most notable difference is in Chapter 7, your assets will be liquidated and the money made will be used to repay creditors. If you filed for Chapter 7, there are some assets that your bankruptcy trustee will sell if their equity is over the exemption amount. These exemption amounts are set by the State of Ohio. Chapter 13 involves creating a personalized payment plan to repay your debts while retaining your assets.

Ohio’s Bankruptcy Exemptions

In Ohio, some key exemptions and rules apply to your property and belongings. Exemption laws help determine what property you can keep after filing for bankruptcy. It is important to note that Ohio does accept the use of federal exemptions. You must use Ohio-specific exemptions when you file for bankruptcy. The State of Ohio has chosen to protect these items so people have basic items to live and to help them rebuild after bankruptcy. The below exemptions are used to help determine how much the debtor must pay back to their creditors. The more non-exempt property you have, the more your required payment will be.

Homestead Exemption

Ohio allows the debtor to exempt up to $182,625 of equity in a home or property. If you are married and filing jointly, this amount doubles. This property must be your main residence and can apply to a home, condo, townhome, and the land it sits on. Investment properties are not protected by the homestead exemption. If you still have a mortgage on your home, take your home’s current value and subtract the amount of money you still owe on your mortgage. The amount remaining is your equity. If this amount is less than or equal to $182,625, or $365,250 if filing jointly, your home is protected under the homestead exemption. If your equity is above the exemption amount, your trustee can sell your home, pay you the exemption amount, and use the remaining profits to pay creditors.

Vehicle Exemption

Ohio’s vehicle exemption protects up to $4,450 of equity in one motor vehicle. This can cover a car, truck, motorcycle, or any other personal vehicle. If you do not own your vehicle, you can take the amount your car is worth and subtract the amount you still owe on your loan. The amount remaining is your equity. If this amount is less than or equal to $4,450, you can keep your vehicle. If your equity is larger than the exemption amount, your trustee can sell your car, pay you the exemption amount, and use the remaining profits to pay creditors.

Personal Property Exemptions

Personal property such as clothing, furniture, appliances, and electronics are protected by exemptions with some stipulations. Each item must be valued at $625 or less and the total of all of the items cannot exceed $14,875. In addition, you can keep an additional amount of $2,825 of jewelry and $2,825 of books, tools, or other occupational equipment. You can also keep up to $550 of cash on hand or in a bank account. Additionally, one single burial plot is allowed to be fully exempt. These exemptions allow a debtor to keep important items to ensure that they have an opportunity for a fresh start. It is important to get the most out of your personal property exemptions so the assets that matter most are protected. Working with a bankruptcy attorney will make this process easy and ensure that you are getting the most out of your bankruptcy filing.

Wildcard Exemption

If you have any additional assets that you would like to protect that haven’t been covered yet, you can exempt any asset of your choosing up to $1,475. If you have filed jointly, you can double this amount and protect something up to $2,950. This wildcard exemption allows you to protect assets that haven’t been named or you can add this to a different personal property exemption to increase the amount.

Additional Protected Exemptions In Ohio

There are more personal assets that are also protected when you file for bankruptcy in Ohio. Child support and alimony payments are looked at as necessary ongoing support and they will be exempt. If the debtor receives a child tax credit or an earned income tax credit they will stay protected in the state of Ohio. Other public benefits such as disability assistance, workers’ compensation, and unemployment compensation are fully exempt. Ohio also has several exemptions for insurance so the debtor can remain protected during their bankruptcy filing. Any 401K, IRA, and other retirement accounts are protected from bankruptcy, as well as any pensions and annuities.

Do You Have Debt And Need A Financial Fresh Start?

If you have student loans, certain tax debts, or credit card debts and are looking for an opportunity to get your finances together, contact Jump Legal today. We serve the Columbus, Ohio community and have more than 20 years of experience handling bankruptcy law. We know how difficult it can be to understand what is non-dischargeable and what you can discharge under Chapter 7 and Chapter 13 bankruptcy laws. Our bankruptcy attorneys will work with you to find the right solution for your debt, and you will be one step closer to financial freedom. Contact Jump Legal if you are struggling with debt and are considering filing for Chapter 7 or Chapter 13 bankruptcy. Our attorneys can help you with the filing process, understanding bankruptcy law, and they will be there for you every step of the way during your bankruptcy case. We have the experience and knowledge to help you easily and quickly find financial relief. Contact Jump Legal today for a free consultation.