One of the most common fears about filing bankruptcy is losing everything you own. In reality, bankruptcy law allows debtors to keep a substantial amount of property through what are called exemptions. In Ohio, the state has its own set of exemptions that apply to bankruptcy cases — and for most people who file, all or nearly all of their property is fully protected. Understanding Ohio's exemptions is essential to knowing what a bankruptcy will actually look like for you.
How Exemptions Work
When you file Chapter 7 bankruptcy, a trustee is appointed to review your assets. Property that is not protected by an exemption can theoretically be sold by the trustee to pay creditors. Property that is fully covered by exemptions cannot be touched — you keep it.
In Ohio, debtors must use Ohio's state exemptions rather than the federal bankruptcy exemptions (Ohio has "opted out" of the federal exemption system). Ohio's exemptions are set by statute and are adjusted periodically for inflation.
The Homestead Exemption
Ohio's homestead exemption allows you to protect up to $182,625 (the amount in effect from April 1, 2025, through March 31, 2028) of equity in your primary residence. This applies to a house, condominium, or mobile home that you occupy as your primary residence.
If your home equity exceeds the exemption amount, the trustee could potentially sell the home and pay you the exemption amount while using the excess to pay creditors. However, if your equity is within the limit — which is the case for most Chapter 7 filers — your home is protected.
"Equity" means the value of the property minus what you owe on any mortgage or other liens. If your home is worth $180,000 and you owe $160,000, you have $20,000 in equity — fully within the exemption.
Motor Vehicle Exemption
Ohio allows you to exempt up to $5,025 in equity in one motor vehicle. If you own your car outright and it is worth more than $5,025, the excess is not protected and the trustee could sell it. However, if you have a car loan, the exemption applies to your equity — the difference between the car's value and the loan balance.
Many Chapter 7 filers have vehicles worth less than the exemption, or have cars with loans that reduce their equity below the limit. In those cases, the vehicle is protected.
Personal Property Exemptions
Ohio provides exemptions for various categories of personal property:
- Household goods and furnishings: Up to $16,850 in total for household goods, clothing, books, animals, appliances, electronics, and similar items
- Jewelry: Up to $2,125 in jewelry
- Health aids: Professionally prescribed health aids are fully exempt
- Tools of the trade: Up to $3,200 in tools, equipment, or instruments used in your occupation
- Cash and bank accounts: A limited wildcard-type exemption
Retirement Accounts: Often the Most Valuable Exemption
Ohio provides full protection for most retirement accounts, including:
- 401(k) and 403(b) plans
- Individual Retirement Accounts (IRAs) — traditional and Roth — up to the federal limit ($1,711,975 per person for cases filed from April 1, 2025, through March 31, 2028)
- Pension plans
- ERISA-qualified plans
This exemption is extremely valuable. Filers who have built up significant retirement savings — sometimes $100,000, $200,000, or more — can preserve those accounts entirely while still discharging their unsecured debts. This is one of the most important advantages of bankruptcy that many people do not know about.
Wages
Ohio protects a portion of earned but unpaid wages. Specifically, the greater of 75% of disposable earnings or an amount equivalent to 30 times the federal minimum wage per week is exempt from creditor garnishment.
Public Benefits and Insurance Proceeds
Ohio also exempts:
- Social Security benefits
- Unemployment compensation
- Workers' compensation
- Disability benefits
- The cash surrender value of life insurance policies in certain circumstances
The Wildcard Exemption
Ohio provides a modest wildcard exemption — currently $1,675 — that can be applied to any property of the debtor's choosing. This provides some flexibility for property that doesn't fit neatly into other categories.
Planning Around Exemptions
The timing and planning of a bankruptcy filing can significantly affect how much property you are able to protect. For example:
- Converting non-exempt assets into exempt assets (such as paying down a mortgage with savings before filing) may be permissible in some cases but can be considered fraudulent in others — the line is important and an attorney can help you understand it.
- Filing as a married couple can sometimes allow you to double certain exemptions.
- The timing of when you acquire property relative to when you file can affect whether it is included in the bankruptcy estate.
Exemption planning is one of the most important services a bankruptcy attorney provides. Getting it right means protecting as much of your property as possible while staying within the law.