Updated February 8, 2019
Filing for bankruptcy in Kentucky doesn’t mean that you’ll lose everything. Using Kentucky’s bankruptcy exemptions, you can keep the property you’ll need to maintain a home and employment, such as furnishings, clothing, and a retirement account.
But you have another choice—you can use the federal bankruptcy exemptions. Since the federal system is more liberal, many people will come out ahead with this option.
Learn more about filing a Kentucky bankruptcy.
Some states allow residents to choose between the state and federal bankruptcy exemptions, and Kentucky is one of them. But you can’t protect property by using exemptions from both lists—you must pick the system that will work best for you. If you elect to use Kentucky’s state exemptions, the federal nonbankruptcy exemptions will be available to you, too.
Here are some exemptions that are used commonly in Kentucky. When reviewing them, you’ll want to consider the following:
427.060 – Equity in real or personal property used as a family residence up to $5,000. Alternatively, you can use this exemption to protect a burial plot.
427.010 – Equity in a motor vehicle up to $2,500.
427.160 - Any property—real estate or personal property—up to a value of $1,000.
427.010 - Health aids; clothing, furniture, jewelry, and articles of adornment up to $3,000 total.
427.150 - 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.
304.39-260 - Medical expenses paid and reparation benefits received under the motor vehicle reparation law.
11 U.S.C. § 522 - 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). IRAS and Roth IRAs to the maximum amount. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)
427.150 - ERISA - all qualified benefits that were deposited more than 120 days before filing for bankruptcy.
67A.620, 427.125, 427.150(2)(e) - Firefighters and police officers.
427.150(2)(e), 67A.350 - State and county employees.
161.700; 427.150(2)(e) - Teachers.
205.220 - Public assistance.
427.150 - Crime victims' compensation.
341.470 - Unemployment compensation.
342.180 - Workers' compensation.
304.14-330 - Annuity contract proceeds up to $350 per month.
304.29-181; 427.110 - Fraternal benefit society benefits.
304.14-320 - Group life and health insurance proceeds.
304.14-310 - Health or disability insurance proceeds.
304.14-300 - 304.14-350 - Life insurance proceeds.
Tools of the Trade
427.010 - Farmer's tools, equipment, and livestock up to $3,000.
427.030 - 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.
427.040 - Library, office equipment, instruments, and furnishings of a minister, attorney, physician, surgeon, dentist, veterinarian, or chiropractor up to $1,000.
427.150 - Alimony, maintenance, or child support needed for support.
Add any applicable federal nonbankruptcy exemptions.
Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:
You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?
This list includes the majority of bankruptcy exemptions available in Kentucky, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Kentucky Revised Statutes or with a local bankruptcy lawyer.
To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?