Bankruptcy Laws in Kentucky.

Kentucky allows debtors to choose between state and federal bankruptcy exemptions. Federal exemptions are generally far more favorable, especially for homestead protection. Debtors cannot mix and match — must choose one complete system.

Protects up to $5,000 of equity in the debtor's primary residence — one of the lowest homestead exemptions in the nation. Federal alternative: $27,900 individual / $55,800 joint (2025).

Household furnishings and clothing: $3,000. Tools, equipment, and livestock (farming): $3,000. Motor vehicle (1 vehicle + accessories): $2,500. Wildcard: $1,000 in any property (KRS 427.160).

ERISA-qualified plans (401(k), 403(b), pensions, profit-sharing): unlimited exemption. IRAs and Roth IRAs: exempt, but contributions made within 120 days before filing are NOT exempt. Federal IRA cap (2025): $1,711,975.

The greater of 75% of disposable weekly earnings or 30 times the federal minimum hourly wage per week is exempt. Maximum garnishment: 25% of disposable earnings or the amount exceeding 30x minimum wage, whichever is less.