3 little known bankruptcy exemptions

| Apr 12, 2021 | consumer bankruptcy | 0 comments

The purpose of bankruptcy is not to take away all your money and possessions. Its use helps give people a fresh start — to become financially independent from debt. Exemptions from bankruptcy are those items protected from creditors.

You may already know that sometimes homes and cars are exemptions. Others include intangible assets such as retirement accounts, pension plans and some life insurance policies. However, there may be other exemptions you do not know about that can help keep you stable as you work through the bankruptcy process.

1. Public benefits

Kentucky allows you to keep the money received from public benefits. These include:

  • Public assistance
  • Unemployment compensation
  • Workers’ compensation

Kentucky code 342.180 allows for workers to keep compensation except for child support obligations.

2. Tools of the trade

If you work in a trade, your tools are an essential element of your job. They are a necessity. Kentucky statute states that you can keep tools not exceeding the current value limit.

Professional libraries, office equipment, instruments and furniture not exceeding the limit set by law is safe for professions such as:

  • Attorney
  • Physician
  • Surgeon
  • Chiropractor
  • Veterinarian
  • Dentist

Creditors cannot take away your work vehicle as long as its value does not exceed the limit.

3. The wildcard

When filing for bankruptcy in Kentucky, you have the option of asking for the wildcard exemption. The wildcard is a general exemption that you can apply to any property.

Kentucky is one of 17 states that allows you to decide if you want to choose to take state or federal exemptions.