In bankruptcy, a homestead exemption protects equity in your home. Here you’ll find specific information about the homestead exemption in Kentucky.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
Under the Kentucky exemption system, homeowners may exempt up to $5,000 of any property used as a homestead.
Married couples who file joint bankruptcy and who own their home together can double the Kentucky bankruptcy exemption, giving a total exemption amount of $10,000.
(To learn more about joint bankruptcy filings, see Nolo's section on Bankruptcy Options for Married Couples.)
In Kentucky, the homestead exemption applies to any property, real or personal, you use as a home, including houses, mobile homes, and condominiums, It also covers burial plots.
The exemption also applies to proceeds from the sale of a homestead.
In Kentucky you can use either the state exemption system or the federal bankruptcy exemption system (but you can’t pick and choose different exemptions from each system – you have to use all state exemptions or all federal exemptions.)
The federal bankruptcy homestead exemption amount is $22,975. The exemption may be used for homes, condos, co-ops, mobile homes, and burial plots. Married couples may double this exemption. You can find the federal bankruptcy homestead exemption at 11 U.S.C. §522(d)(1) and (5).
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Kentucky the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy.
Kentucky’s homestead exemption is found in the Kentucky state statutes at Ky. Rev. Stat. Ann. 427.060 and Ky. Rev. Stat. Ann. 427.090. You can find the state statutes on the website of the Kentucky legislature at www.lrc.ky.gov. To learn more about finding and checking state statutes, check out Nolo’s Laws and Legal Research area.
To learn more about how your property is protected (or not) from creditors when you file for bankruptcy, see Nolo's section on Bankruptcy Exemptions & Your Property.