What is exempt from bankruptcy in Kentucky?

When you file for bankruptcy in Kentucky, you have a choice of using the Kentucky state bankruptcy exemptions or federal exemptions to keep certain personal property such as your home, car and jewelry as long as they fall within the exemption values. You must claim the exemptions at the time you file your petition. Kentucky state exemptions include the following: 

• Homestead $5,000; sale proceeds are exempt.
• Insurance annuity proceeds up to $350 per month.
• Burial plot $5,000 in lieu of homestead.
• Clothing, jewelry and furnishings -$3,000 total.
• Health aids.
• IRA’s and pension accounts.
• Motor vehicle up to $2,500.
• Tools of trade up to $1,000.
• Wild Card-$1,000 of any property.
• 75% of earned but unpaid wages. Judge may approve higher amount for low income debtor.
• Worker’s compensation, unemployment, disability, social security payments.
• Aid to blind or aged.
• Wrongful death recoveries needed for support.
• Crime victims’ compensation.
• Personal injury awards up to $7,500 (not including pain and suffering).
• Alimony and child support.  

Federal exemptions include the following: 

• Homestead, $21,625.
• $550 for each household good up to $11,525.
• Jewelry $1,450.
• Motor vehicle $3,450.
• Tools of trade and books $2,175. 

If you file under Chapter 7, then you will need to be more concerned with the exemptions than if you file under Chapter 13. Under Chapter 13, you can keep your assets because you enter into a court-approved repayment plan with your creditors reducing your debts. The repayment plan is for 3-5 years. After you complete the plan, any remaining unsecured debt will be discharged.        

You should speak to a Kentucky bankruptcy attorney before you make a decision to file your petition. The attorney can advise you which Chapter to file under, and prepare the appropriate forms. The attorney can represent you in court.