Ohio Senate Bill 281 took effect on September 30, 2008. This law
increases the property exemptions available in a bankruptcy to
the levels allowed under federal law. These exemptions also apply
to shield some of a debtor's property from creditors in a judgment.

These exemptions have greatly increased over the paltry amounts
in the previous law, which had not been changed for years. Under
the new law, these exemptions will also increase periodically with
inflation.

Some of the increases in the exemptions are: for principal residence,
from $5000 to $20,200; for one automobile, from $1000 to $3225;
for jewelry, from $400 to $1350; for tools of the trade, from
$750 to $2025; and for the "wild card" (available only in bankruptcy),
from $400 to $1075.

Obviously a person filing for bankruptcy now will be in a much
better position than if they had filed before SB 281 took effect.
In a Chapter 7, a filer would now be able to keep $20,200 of the
equity in their home, as opposed to $5000. In a Chapter 13, the
new law will save the filer $15,200 in payments over the term of
the Chapter 13 just for the home alone. For a Chapter 13 that
lasts three years, this amounts to a savings of over $422 per month.

(In a Chapter 13 bankruptcy, the unsecured creditors have to
receive at least as much as they would have received in a Chapter
7 liquidation. If you own a $100,000 house free and clear, you
would have to redeem $79,800 over the term of the Chapter 13 bankruptcy,
assuming you have that much unsecured debt. Under the old law,
you have to pay back $95,000.)

SB 281 was passed by the Ohio General Assembly and signed by
the Governor in late June 2008. So, why weren't the bankruptcy
lawyers shouting this from the rooftops? I didn't hear a peep
out of them about this new law. The only way I found out about it was
reading an article in the newspaper on laws passed by the legislature
in June. And this didn't receive top billing, a new drunk driving
law did. In fact in the summer I saw TV commercials for bankruptcy lawyers
saying "Don't delay." They should have been saying "Wait
until SB 281 takes effect." But, then they wouldn't have had
any business until October. Do you really think the lawyers care
about your best interests? Think again.

While it's nice that Ohio finally came into the 20th century on this
issue, lawmakers might want to ponder entering the 21st century sometime
soon. Other states do a much better job of protecting their citizens.
In Florida and Texas creditors can't touch your home. (That's why
O.J. Simpson moved to Florida.) Minnesota has a $200,000 homestead
exemption. If the government can bail out the Wall Street fat cats,
why not save the homes of ordinary people suffering from the
economic crisis?