Ohio Bankruptcy Abandonment of Property Law
- After you file a bankruptcy petition in Ohio, the clerk of the bankruptcy court will transmit your petition to the United States trustee. The United States trustee appoints a local trustee to administer your case. After you file for bankruptcy, your property becomes property of the bankruptcy estate. The bankruptcy trustee takes control of all property of the bankruptcy estate. The trustee will decide whether to sell the property or allow you to keep it.
- The bankruptcy trustee figures out which property that you own qualifies to be exempt under Ohio's exemption laws. This property will no longer be property of the bankruptcy estate. The bankruptcy trustee will sell all other property and use the money earned to pay your creditors. In some cases, certain property may be burdensome to the estate or of inconsequential value. The bankruptcy trustee will abandon this property.
- To abandon property, the bankruptcy trustee must follow specific procedures. The bankruptcy trustee must give notice and an opportunity for creditors to be heard. The bankruptcy trustee usually sends creditors notice of her intent to abandon property along with notices for the first meeting of creditors (known as a 341 meeting). If any creditor wishes to object to the abandonment of property, he should do so during the 341 meeting. If a creditor objects at the 341 meeting, he will obtain a hearing date from the bankruptcy court; transmit notice of a hearing on the objection; and file notice with proof of service with the Ohio bankruptcy court within 10 days after the 341 meeting.
- A creditor would object to the abandonment of property if he has a lien or security interest on the property. The creditor would have to file evidence of the lien or security interest with the trustee. If no creditors object to the abandonment of property, a certificate may be obtained from the clerk of the Ohio bankruptcy court certifying that no objections have been timely filed with the clerk.