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Dealing with debt collectors is stressful and frightening. You may believe that an affordable debt relief option does not exist. However, you may find that filing bankruptcy in Ohio is one of the best ways to eliminate debts that you cannot afford to pay. 

Chapter 7 Bankruptcy in Ohio

Filing Chapter 7 bankruptcy in Ohio can eliminate most unsecured debts in as little as six months. Chapter 7 eliminates unsecured debts to include, but not limited to, personal loans, credit card debts, medical bills, old income tax debts, and most personal judgments. However, the six-month timeline assumes that your case is a no-asset Chapter 7 case. 

In a no-asset Chapter 7 case, you keep all your property. Many debtors (individuals who file bankruptcy cases) are able to retain all of their property when they file for bankruptcy relief. However, in some cases, a debtor might lose property in a Chapter 7 case if the property has substantial net equity that is not protected by a bankruptcy exemption. Net equity is the value of an item after subtracting the amounts owed on secured liens (i.e. mortgages, title loans, etc.).

If you want to learn more about Chapter 7 bankruptcy cases and if Chapter 7 is right for you, read our Chapter 7 Bankruptcy Process article. You can also use our free Chapter 7 means test calculator to see if you qualify for Chapter 7.

Chapter 13 Bankruptcy in Ohio

Filing Chapter 13 Bankruptcy in Ohio might be a wise choice if you are behind on your mortgage payments or car payments. You can prevent foreclosure and repossessions by repaying the past due payments through a Chapter 13 plan. In addition, some individuals can lower their car payments or get rid of second mortgages in Chapter 13, if they meet certain legal requirements.

A Chapter 13 case allows you to get back on your feet when you have debts you cannot afford to pay, but you earn too much money to file under Chapter 7. You only pay a fraction of your unsecured debts through your Chapter 13 plan. Most importantly, upon completion of the Chapter 13 plan, eligible unsecured debts are discharged (forgiven).

Many of the Chapter 13 bankruptcies in Ohio are five-year bankruptcy plans. However, you might qualify for a three-year Chapter 13 plan if your income and debts fall within certain levels. 

If you want to learn more about filing Chapter 13 in Ohio, read our Chapter 13 Bankruptcy Guide. You can also use our free Chapter 13 bankruptcy calculator to estimate how much a Chapter 13 plan payment might be if you file Chapter 13 bankruptcy in Ohio.

Ohio Means Test Calculator

The Means Test is a bankruptcy form that calculates your average monthly income. The average monthly income determines your annual median income. The legislature added an income test to determine if individuals were eligible for a bankruptcy discharge (forgiveness of debt) when it changed bankruptcy laws in 2005. Therefore, if you “fail” the Means Test, you are probably not eligible for a bankruptcy discharge under Chapter 7. 

Your median income is compared to the median income of other similarly sized households in Ohio to determine your Chapter 7 eligibility. If your income is higher than the median income of an Ohio household of the same size, you “fail” the first part of the Means Test. However, there is a second part of the Means Test that measures your disposable income (income after allowable living expenses). If your disposable income is negative or below a certain amount, you might be able to file under Chapter 7. In Chapter 13 cases, the Means Test calculates your disposable income, which is a factor in calculating your Chapter 13 plan payment. 

The information used to calculate the Bankruptcy Means Test changes based on current data compiled by the Internal Revenue Service and the Census Bureau. You must check for the current median income figures from the United States Trustee’s (UST’s) office. 

Ohio Chapter 7 Income Limits

At this time, Ohio Means Test figures are for cases filed on or after April 1, 2020. Those figures are:

# of PeopleAnnual Income
1$51,297
2$64,665
3$77,642
4$93,239
5$102,239
6$111,239
7$120,239
8$129,239
9$138,239

If you have more than four people in your household, you can add $9,000 per person over four to the median income for a household of four.

Ohio Credit Counseling and Debtor Education Courses

When filing a bankruptcy case, you must take two bankruptcy courses as part of the bankruptcy process. The first bankruptcy course is a credit counseling course. The second bankruptcy course is a debtor education course.

When enrolling in the required bankruptcy courses, ensure you use a company that is authorized by the UST’s office. You can find a list of the approved credit counseling and debtor education companies on the UST website.

Ohio Bankruptcy Exemptions

The legislature made provisions for debtors to protect portions of their property from the court and their creditors. Federal bankruptcy exemptions allow debtors to protect specific amounts of equity in certain property. The federal bankruptcy exemptions are listed in the Bankruptcy Code. The NCLC has a list of the federal bankruptcy exemption amounts.

States can opt out of using the federal bankruptcy exemptions, or they may allow debtors to choose between federal and state bankruptcy exemptions. If you have lived in Ohio for at least two years before filing a bankruptcy case, you must use Ohio bankruptcy exemptions. 

Ohio bankruptcy exemptions adjust every three years to reflect increases in the cost of living. The state bankruptcy exemptions are found in Ohio Revised Code §2329.66. The last increases for Ohio bankruptcy exemptions became effective on April 1, 2019. Some of the most common bankruptcy exemptions available in Ohio include, but are not limited to:

  • Homestead exemption $145,425
  • Motor vehicle exemption $4,000
  • Household goods exemption $13,400
  • Jewelry exemption $1,700
  • Tools of the trade exemption $2,550

Bankruptcy Courts and Trustees for Ohio

Ohio is divided into two bankruptcy districts, the Southern District of Ohio and the Northern District of Ohio.

The Southern District of Ohio Bankruptcy Court has three court divisions. The divisions are located in Cincinnati, Columbus, and Dayton. The Northern District of Ohio Bankruptcy Court has five court divisions. The divisions are located in Akron, Canton, Cleveland, Toledo, and Youngstown. Each case is assigned to a district and division based on the county of residence of the debtor.

Bankruptcy trustees are assigned to administer the bankruptcy estate. The Ohio Chapter 13 trustees and the Ohio Chapter 7 trustees are assigned to cases by district and division. 

Alternatives to Filing Bankruptcy in Ohio

Although for some individuals, filing bankruptcy may not be the best solution to their debt problems. There could be alternatives to bankruptcy that might provide the same or better debt relief. 

Ascend helps you explore all your debt relief options. In addition to comparing Ohio Chapter 7 and Chapter 13 bankruptcy cases, you can use our Debt Settlement Guide and Debt Consolidation Comparison Guide to compare other non-bankruptcy alternatives for debt relief. 

If you have questions about bankruptcy and debt relief, contact Ascend. We have resources and practical information that you can use as you decide how to get out of debt and back on your way to financial wellbeing.

Post Author: Ben Tejes

Ben Tejes is a co-founder and CEO of Ascend Finance. Before Ascend, Ben held various executive roles at personal finance companies. Ben specializes in Chapter 13 Bankruptcy, Debt Settlement, Chapter 7 Bankruptcy and debt payoff methods. In his free time, Ben enjoys spending time going on adventures with his wife and three young daughters.

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