We are often asked: “What are exemptions in a bankruptcy in Louisville and across Kentucky? The simple fact of the matter is that bankruptcy helps you to protect a lot of your personal belongings and other assets. “Exemptions” are specific provisions in federal law as well as Kentucky state law designed to allow you to protect a particular type or quantity (in US dollars) of your assets and belongings.
Here in Kentucky, we have our own bankruptcy exemptions. When you elect to file a Chapter 7 or a Chapter 13 bankruptcy in Kentucky, you get to choose whether you want to use Kentucky’s exemptions or the federal exemptions. You can’t take a little from both, it’s either one or the other.
My name is John Schmidt, and after more than 25 years of helping the people of Louisville, Shepherdsville, Mount Washington, Shelbyville, Taylorsville, Radcliff, Elizabethtown, and/or Jeffersontown Kentucky to file for bankruptcy protections, I can tell you the choice of which exemptions are best is one of the many reasons to have an experienced bankruptcy attorney.
What are the Federal Exemptions in a Bankruptcy in Louisville or Anywhere in Kentucky?
How do you know which exemptions to choose? If you live in Kentucky, you can choose to apply the federal exemptions in a bankruptcy. The federal homestead exemption is $25,150 in equity if you own your own home. If you don’t own your house or residence or any other real property you may take a “wildcard” exemption of $12,575. Wildcard means literally that; you can apply that amount to one asset or a portion of many assets you wouldn’t be able to protect otherwise.
Under federal exemptions, you can protect $4,000 in equity in a motor vehicle, $13,400 in household goods ($625 per individual item), and $1,700 in jewelry. If you have “tools of the trade” (including books and implements) you can protect $2,525 worth of those tools. The wildcard can help make up the difference if you have an individual item that is worth more than a given exemption, or if a total group exceeds the maximum value.
You will be able to retain any health aid prescribed by a healthcare professional. Retirement and pension accounts are protected up to established limits (presently over $1,500,000).
What are the Kentucky Bankruptcy Exemptions?
Remember, you must choose between exemptions off the federal list or Kentucky’s list, but you cannot use both. Kentucky provides up to $5,000 for real or personal property that is the family residence, or a burial plot. You can protect up to $2,500 in equity for one motor vehicle, but $3,000 in clothing, jewelry, and furniture. Other Kentucky exemptions include protections for the recipient of spousal support (maintenance or alimony) and child support, public employee pensions, including teachers, firefighters, and law enforcement. There are a large variety of other Kentucky bankruptcy exemptions, including a wildcard of $1,000.
Which exemptions will work best in your unique situation?
Contact an Experienced Shepherdsville Bankruptcy Attorney Serving the Greater Louisville Area
The choice of exemptions in a bankruptcy in Jefferson, Bullitt, Hardin, Spencer, Shelby, Oldham or any Kentucky county is one of the most important choices you must make to complete a Chapter 7 or Chapter 13 bankruptcy. You need the advice and counsel of the Law Offices of John Schmidt & Associates, PLLC to guide you through the process and select the best chapter and exemptions for your unique circumstances.
We invite you to contact us via e-mail, schedule an appointment or call us today at (502) 509-1490 to get the answers you need and relief from financial challenges and creditors.
