The Kentucky bankruptcy exemptions chart, see below, details the property you can exempt or protect from creditors when you file bankruptcy in Kentucky. You may exempt any property that falls into one of the exemptions categories below, up to the dollar amount listed. You will be able to kept this exempted property after you file bankruptcy. Please note that there are certain debts which you will not be able to erase in bankruptcy. (see Non-dischargeable Debts)
An exemption limit applies to any equity you have in the property. Equity is the difference between the value of the property and what is owed on the property. For example, a car valued at $5000 with a loan of $4500 has an equity value of only $500.
If the property is secured by a loan, such as a car or home, and you are current on the payments and the equity is covered by your exemptions, you may elect to keep making payments on the loan and keep this property through the bankruptcy. If all the equity is not covered by your exemptions the trustee may elect to liquidate this asset and distribute the proceeds. Generally, in this case, you would be entitled to the value of your exemption in the asset as a cash payment.
Bankruptcy law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted.
To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.
When you file bankruptcy in Kentucky you may also use certain federal exemptions in addition to your Kentucky exemptions.
ASSET | EXEMPTION DESCRIPTION | LAW SECTION |
HOMESTEAD | Real or personal property used as residence to $5,000; sale proceeds exempt | 427.060, 427.090 |
INSURANCE | Annuity contract proceeds to $350 per month | 304.14-330 |
Cooperative life or casualty insurance benefits | 427.110(1) | |
Fraternal benefit society benefits | 427.110(2) | |
Group life insurance proceeds | 304.14-320 | |
Health or disability benefits | 304.14-310 | |
Life insurance policy if beneficiary is a married woman | 304.14-340 | |
Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors | 304.14-350 | |
Life insurance proceeds or cash value if beneficiary is someone other than insured | 304.14-300 | |
MISC. | Alimony, child support is needed for support | 427.150(1) |
Property of business partnership | 362.270 | |
PENSIONS | Firefighters, police officers | 67A.620, 95.8878, 427.120 427.125 |
IRAs | In re Worthington, 28 B.R. 736 (W.D. KY. 1983) | |
State employees | 61.690 | |
Teachers | 161.700 | |
Urban county government employees | 67A.350 | |
Other pensions | 427.150(2)(e), (f) | |
PERSONAL PROPERTY | Burial plot to $5,000 in lieu of homestead | 427.060 |
Clothing, jewelry, articles or adornment and furnishings to $3,000 total | 427.010(1) | |
Health aids | 427.010(1) | |
Lost earnings payments needed for support | 427.150(2)(d) | |
Medical expenses paid and reparation benefits received under motor vehicle reparation law | 304.39-260 | |
Motor vehicle to $2,500 | 427.010(1) | |
Personal injury recoveries to $7,500 (not to include pain and suffering or pecuniary loss) | 427.150(2)(c) | |
Wrongful death recoveries for person you depended on needed for support | 427.150(2)(b) | |
PUBLIC BENEFITS | Aid to blind, aged, disabled, public assistance | 205.220 |
Crime Victims’ Compensation | 427.150(2)(a) | |
Unemployment Compensation | 341.470 | |
Workers compensation | 342.180 | |
TOOLS OF TRADE | Library, office equipment, instruments and furnishings of minister, attorney, physician, surgeon, chiropractor, veterinarian or dentist to $1,000 | 427.040 |
Motor vehicle of mechanic, mechanical or electrical equipment servicer, minister, attorney, physician, surgeon, chiropractor, veterinarian or dentist to $2,500 |
427.030 | |
Tools, equipment, livestock and poultry of farmer to $3,000 | 427.010(1) | |
Tools of non-farmer to $300 | 427.030 | |
WAGES | Minimum 75% of earned but unpaid wages; bankruptcy judge may authorize more for low-income debtors | 427.010(2), (3) |
WILDCARD | $1,000 of any property | 427.160 |
For more information on filing bankruptcy in Kentucky explore Kentucky Bankruptcy Law.
