No one wants to file for bankruptcy. The word itself seems to have social connotations as well as financial, as if a person is admitting failure. However, the truth is far from that assumption; bankruptcy can be the beginning of a path to success out of debt and harassment by creditors.
To begin, bankruptcy is a way to settle debts, not succumb to them. Trustees -- the appointed person who will help take stock of and organize a debtor's assets -- are there to help find the easiest and shortest way out of debt and return him or her to financial health.
Federal guidelines and Ohio law protect certain assets from seizure or sale in order to ensure that debtors have the tools they need to rebuild their credit. A homestead exemption, for example, protects a home property up to $5,000 in value from being taken during bankruptcy. Joint property may also be exempt if only one spouse is filing for bankruptcy.
Benefits received by a person to ensure financial support are also exempt from seizure or garnishment up to a certain level. Disability benefits up to $600 per month, benevolent society benefits up to $5,000 and other charitable income are protected under federal law.
Insurance payments, pension payments and other benefits may also be protected from seizure during bankruptcy proceedings as well. An attorney may help a debtor discover exactly what may be left out of a trustee's reorganization of payments and assets during bankruptcy proceedings, helping to pave the way to financial health.
Source: Bankruptcy in Ohio, "Ohio Exemptions," accessed Dec. 28, 2017