Specified property of a debtor is exempt from the bankruptcy estate. State law has generally specified the property of a bankrupt which may be exempted from the estate. The Bankruptcy Reform Act of 1978 institutes a new federal policy regarding exemptions. The new federal provisions, however, are under attack. Currently in Ohio, the applicability of the federal avoidance power contained in section 522(f) of the Bankruptcy Code is being questioned. This section provides for the avoidance of certain liens encumbering property otherwise exemptable. Legislation in Ohio specifically provides that the exemption provisions do not affect a security interest of personal property or any lien thereby. The question of whether or not a debtor in Ohio may utilize the federal avoidance power to claim secured property as exempt, when Ohio prohibits exempting such property, is currently being litigated. Further, there is an underlying issue as to whether the avoidance power is unconstitutional as applied to security interests created prior to the enactment of the Bankruptcy Reform Act of 1978. A review of the Bankruptcy Act of 1898, and the exemption provisions of the State of Ohio will facilitate an understanding of the issues involved in the application of the new federal exemption provisions.
Edwards, Karen L.
"Exemptions and Lien Avoidance Under The Bankruptcy Reform Act of 1978 and Ohio Law,"
Akron Law Review: Vol. 14
, Article 4.
Available at: https://ideaexchange.uakron.edu/akronlawreview/vol14/iss4/4