Law Office of Allan E. Dunaway, PLC

Understanding bankruptcy exemptions

Bankruptcy can provide people with a fresh financial start. However, the process does come with certain sacrifices.

Thankfully, there could be ways to reduce these sacrifices. Certain bankruptcy exemptions are effective ways to accomplish this. There are a few important aspects to understand about these helpful options.


There are exemptions that parties may receive according to federal law. These could cover several different assets:

  • Homestead
  • Personal property
  • Retirement accounts
  • Support benefits

There is also a wildcard exemption. As the name indicates, it allows people to select any asset of their choice to save from bankruptcy. The exact amount depends on the available balance of any unused portion of the homestead exemption.

Apart from these federal exemptions, filers could qualify for and choose to take state exemptions. However, it is important to note that parties must select one or the other, not both.


Each state determines the bankruptcy exemptions available to its residents. Along with the potential to save homestead and personal property, the state of Kentucky has a few other exemption options:

  • Wages
  • Tools of the trade
  • Pensions
  • Insurance

There are certain debts that cannot be erased, such as back child support or alimony, student loans and legal fines or penalties. Additionally, limits on the exemption amounts are important to the bankruptcy process. Much of the preparation for filing involves choosing how much or which assets to save in order to meet the exemption limits. Any additional assets would then contribute to the total amount that the court could eventually distribute among the debtors to complete the process.

Though these federal and state regulations lay the groundwork, it is important to understand that the ultimate decision lies with the bankruptcy court. Therefore, along with understanding the exemption options, it is imperative to complete the filing process properly and fulfill all requirements.

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For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

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