How to File for Kentucky Bankruptcy

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Categories: How Tos | Legal | Bankruptcy Law

  • If you are considering bankruptcy and live in Kentucky, you may find the idea of filing to be the key to a rereshing financial start. Bankruptcy is never going to be fun, but it's often one of the best ways for people in some degree of trouble to start with a fresh slate. This page shows you how to file for Kentucky bankruptcy.

  • Introduction

    When filing in Kentucky, you'll be filing in federal court since bankruptcy falls under the umbrella of federal law in all 50 states. However, some aspects of the process still reference specific state law. For instance, limitations on what assets you can retain, as well as the dollar value of those assets, are specific to Kentucky and will change in other states.

  • Step 1: What is Chapter 7 Bankruptcy?

    Chapter 7 bankruptcy (also called Liquidation or straight bankruptcy) is a legal process that cancels unsecured debt and allows a fresh financial beginning for the individual. Asset sales can frequently be avoided, though secured debt usually remains. Should you find that a Chapter 7 bankruptcy is not a viable option for you, a Chapter 13 restructuring may still be possible. However, since details change from state to state, the best thing to do is talk to a bankruptcy attorney who is familiar with the rules and guidelines in Kentucky.

  • Step 2: Chapter 7 Kentucky Income Test

    In order to pass the Chapter 7 Bankruptcy means test, you'll need to prove that your household income that is lower than the median income for Kentucky among identically sized families. This median is measured by the Census Bureau and is as described below for cases filed after March 15, 2009http://research.lawyers.com/Colorado/Bankruptcy-in-Colorado.html:

    1. Single individual: $36,628
    2. Two person family: $45,474
    3. Three person family: $55,391
    4. Four person family: $65,520
    5. Five+ person family: $78,905 plus $6,900 for each extra individual above four

  • Step 3: Chapter 7 Kentucky Exemptions

    Presuming you're eligible to declare Chapter 7 Bankruptcy in Kentucky, you will still get to keep most if not all of your assets. In fact, Kentucky offers two different "exemptions schemes" and you can pick the one that better suits your needs and circumstances. Note that married couples may double the exemptions. Though your attorney will be the one who should go over the entire list with you, some of the exemptions are as followshttp://research.lawyers.com/Kentucky/Bankruptcy-in-Kentucky.html:

    1. Your motor vehicle to $3,225
    2. Personal injury recoveries to $7,500
    3. Health or disability benefits
    4. Tools, equipment, livestock and poultry of farmer to $3,000
    5. Household furnishings, jewelry and personal clothing to $3,000
    6. Jewelry to $1,350
    7. $575 per item in any household goods up to a total of $10,775

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