Q: If a person files for bankruptcy due to high credit card debt, what kind of assets can the person retain?
The person has a house and savings account.
A: There are Ohio state law exemptions that are applied to any equity in any asset to protect it from the Chapter 7 trustee. The Ohio Homestead exemption is $145,425, so most homes are protected in a Chapter 7. For savings accounts, you can apply the cash on hand and the wildcard exemptions, which total about $1,700. The job of a bankruptcy attorney is to be able to identify assets, help you value them, and protect the equity with the exemptions. They also should be able to advise against any potential loss and suggest how to strategize against that situation. In a chapter 13, you keep your assets, but any unprotected equity can raise the amount paid to unsecured creditors. Once again, a bankruptcy attorney should be able to advise you on this issue called the "best interest" of the plan.
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