Understandably so, your personal belongings may hold far more than monetary value to you and your loved ones. That is, they may carry some sort of sentimental value. So you may not want these assets to be liquidated in your bankruptcy proceedings, in an attempt to pay off your creditors. Rest assured, there may be exemption laws in place to protect them. Continue reading to learn whether you can protect your personal belongings in bankruptcy and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you in doing so.

By definition, what are bankruptcy exemptions?

Both federal and Kentucky state laws offer bankruptcy exemptions. Essentially, these laws allow you to have personal belongings in your possession and away from creditors. In a Chapter 7 bankruptcy, you may keep these protected personal belongings. And in a Chapter 13 bankruptcy, you may factor these exemptions into how much you have to repay your creditors through your repayment plan.

What are examples of personal belongings I can protect in bankruptcy?

Before all else, you must choose between the federal and Kentucky state bankruptcy exemptions; you cannot do some of each. However, if you opt for state exemptions, then you may still use any federal non-bankruptcy exemptions that apply to you, such as federal retirement accounts, military retirement accounts, veteran’s benefits, and more.

With that being said, examples of the most commonly used exemptions to protect personal belongings are as follows:

  • The personal property exemption:
    • Household furnishings and clothing of up to $3,000.
    • Tools, equipment, and livestock of up to $3,000.
    • One motor vehicle with accessories with up to $2,500 in equity.
  • The pensions and retirement account exemption:
    • ERISA-qualified retirement accounts.
    • State and county employees’ pensions.
    • Police officers’, firefighters’, and teachers’ pensions.
  • The public benefits exemption:
    • Certain public assistance benefits.
    • Certain unemployment compensation benefits.
    • Certain workers’ compensation benefits.
  • The wildcard exemption:
    • Real or personal property of up to $1,000.

It is worth mentioning that you may be unable to utilize some of the aforementioned personal belongings exemptions if you are opting for the state of Kentucky’s homestead exemption. That is, the homestead exemption may allow you to protect up to $5,000 worth of equity in your real or personal property. This is so long as this property is within Kentucky’s borders and is considered your permanent residence. Or, you may use this exemption as a means of protecting a burial plot for you and your loved ones.

The choice of bankruptcy exemptions is entirely up to you and what best fits your current financial situation. This is why you should not have to go through your bankruptcy proceedings alone. Instead, you should seek the assistance of a skilled Louisville, Kentucky consumer bankruptcy lawyer from Schwartz Bankruptcy Law Center. Contact our firm today.