Upon filing for bankruptcy, you may be aware of your opportunity to discharge certain debts from your direct responsibility. After all, this is likely why you were inclined to undergo these proceedings in the first place. But at the same time, you must also understand that you may have the option of selecting certain bankruptcy exemptions; that is, certain assets that may be spared from being taken away. Follow along to find out the bankruptcy exemptions available to you and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you choose wisely.
What should I know about bankruptcy exemptions?
Generally speaking, upon the commencement of your bankruptcy proceedings, your appointed trustee may take inventory of your assets. They then may go as far as seizing certain assets, so that they may be sold to pay back your creditors. Well, bankruptcy exemptions may work to protect your essential assets from being taken by your trustee in the first place. That is, such assets may be excluded from your bankruptcy estate and continue to be used in your day-to-day life.
What are the Kentucky versus federal bankruptcy exemptions?
Of note, you must choose between the bankruptcy exemptions that the state of Kentucky offers and what is offered at the federal level, not both. However, the bright side to this is that you may receive double the exemption amount if you are filing jointly with your spouse. This is so long as you both opt for Kentucky exemptions or both opt for federal exemptions.
The exemption amounts slightly vary for each category. But a general rule of thumb is to select Kentucky bankruptcy exemptions if you are filing a no-assets Chapter 7 bankruptcy. This bankruptcy type is for when all your assets are exempt or otherwise subject to valid liens. Without further ado, below are the Kentucky versus federal bankruptcy exemptions:
- Kentucky bankruptcy exemptions:
- Home equity: up to $5,000 worth of equity.
- Motor vehicle: up to $2.500 worth of equity.
- Personal property: up to $6,000 worth of livestock, furniture, pets, electronics, etc.
- Wildcard: up to $1,000 of otherwise nonexempt real or personal property.
- Retirement benefits: up to $1.3 million worth of your IRAs, 401(k)s, etc.
- Federal bankruptcy exemptions:
- Home equity: up to $25,150 worth of equity.
- Motor vehicle: up to $4,000 worth of equity.
- Personal property: up to $15,000 worth of livestock, furniture, pets, electronics, etc.
- Wildcard: up to $1,325 of otherwise nonexempt real or personal property plus $12,575 worth of your unused home equity exemption.
- Retirement benefits: up to $1.3 million worth of your IRAs, 401(k)s, etc.
All in all, to thoroughly preserve your assets throughout your proceedings, you must turn to a talented Louisville, Kentucky consumer bankruptcy lawyer. So please get in touch with us at Schwartz Bankruptcy Law Center as soon as you get the free chance.
