 |
|
Kentucky Bankruptcy Laws
The law allows those filing for Chapter 7 bankruptcy to claim certain exemptions, protecting necessary property and income from liquidation. Both federal and state exemptions exist, but Kentucky law allows only state exemptions, such as:
Homestead |
Up to $5,000 |
Personal Property |
Motor vehicle up to $2,500; health aids; clothing, furniture, and jewelry up to $3,000 total; wrongful death recoveries; personal injury recoveries up to $7,500; prepaid tuition funds |
Wages |
Either 30 times the federal hourly minimum wage/wk. or 75% disposable weekly earnings, whichever is greater |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; ERISA-qualified benefits; firefighters; police; state employees; teachers; urban county government employees |
Public Benefits |
Public assistance; aid to blind, aged, disabled; crime victims’ compensation; unemployment; worker’s comp |
Tools of the Trade |
Up to $3,000 for farmer’s tools, equipment, and livestock; others up to $300; equipment for other professionals up to $2,500; office equipment and books up to $1,000 |
Insurance |
Fraternal benefits; group life insurance proceeds; health or disability benefits; qualifying life insurance policies or proceeds |
Wild Card |
Any property up to $1,000 |
Once the type of petition and exemptions are chosen and the required credit counseling is completed, the debtor and their lawyer file the bankruptcy petition with the court, which puts a temporary stay on all collection processes. The bankruptcy trustee then administers the procedure, calling a mandatory 341 meeting with creditors to outline the final plan and answer any questions. If the bankruptcy is approved, the debtor is either substantially debt-free, or working toward being debt free through their Chapter 13 repayment plan.
|
|
