Kentucky Bankruptcy Exemptions

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.