Kentucky Bankruptcy Exemptions
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Like all states, Kentucky has its own set of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy.
In Kentucky, you may use either the Kentucky state exemptions (listed below), or the federal bankruptcy exemptions (you can find these at Federal Bankruptcy Exemptions). You cannot mix and match from each list. If you choose to use the Kentucky state exemptions, you may also use any applicable amounts in the federal nonbankruptcy exemptions.
Unless noted otherwise, if a couple is married and filing jointly in Kentucky, each spouse may claim the full amount of each exemption. This is informally called “doubling.”
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
Kentucky Bankruptcy Exemptions
Unless otherwise noted, all law references are to the Kentucky Revised Statutes.
Real or personal property used as a family residence up to $5,000. Sale proceeds are also exempt. (427.060)
Annuity contract proceeds up to $350 per month (304.14-330)
Fraternal benefit society benefits; casualty insurance or cooperative life benefits (427.110)
Group life insurance proceeds. (304.14-320)
Health or disability benefits. (304.14-310)
Life insurance policy if the beneficiary is a married woman. (304.14-340)
Life insurance proceeds if policy prohibits use to pay creditors. (304.14-350)
Life insurance cash value or proceeds if the beneficiary is someone other than the insured. (304.14-300)
Alimony or child support needed for support. (427.150)
Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans). (11 U.S.C. § 522)
IRAS and Roth IRAs to $1,171,150. (11 U.S.C. § 522(b)(3)(C)(n))
ERISA - all qualified benefits that were deposited more than 120 days before filing for bankruptcy. (427.150)
Police officers (427.120)
State employees (61.690)
Urban county government employees (67A.350)
Burial plot up to $5,000 instead of homestead. (427.060)
Motor vehicle up to $2,500; health aids; clothing, furniture, jewelry, and articles of adornment up to $3,000 total. (427.010)
Lost earnings payments needed for support; wrongful death recoveries for person you depended upon for support; personal injury recoveries up to $7,500, but not including pain, suffering, or pecuniary loss. (427.150)
Medical expenses paid and reparation benefits received under the motor vehicle reparation law. (304.39-260)
Prepaid tuition payment fund accounts (164A.707(3))
Public assistance; aid to blind, aged, disabled (205.220), includes earned income tax credit if eligible for Kentucky benefits (In re Beltz, 263 B.R. 525 (Bankr. W.Dl. Ky. 2001)
Crime victims' compensation (427.150)
Unemployment compensation (341.470)
Workers' compensation (342.180)
Tools of Trade
Farmer's tools, equipment, livestock, and poultry up to $3,000. (427.010)
Nonfarmer's tools up to $300; motor vehicle of mechanic, mechanical or electrical equipment servicer, minister, attorney, physician, surgeon, dentist, veterinarian, or chiropractor up to $2,500. (427.030)
Library, office equipment, instruments and furnishings of a minister, attorney, physician, surgeon, dentist, veterinarian, or chiropractor up to $1,000. (427.040)
The greater of the following: 30 times the federal minimum hourly wage per week or minimum of 75% of disposable weekly earnings. Judge may approve more for low income debtors. (427.010)
Any property up to $1,000 (427.160)
Add any applicable Federal Nonbankruptcy Exemptions.
This list includes the majority of bankruptcy exemptions available in Kentucky. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, Kentucky may have changed the amounts since this list was last updated in June of 2011. Consider cross-checking this list with www.legalconsumer.com, which updates the state exemption amounts regularly, or check with your local bankruptcy court.