When you file bankruptcy, you get certain exemptions under Kentucky bankruptcy law. Exemptions are allowances for assets that you may keep through the bankruptcy. You can take an exemption for your vehicle, your home and your personal belongings. The law does set a monetary value for each exemption, though, so you may not be able to keep every asset. Any asset that does not qualify for an exemption is non-exempt. The United States Bankruptcy Court explains non-exempt assets become property of the court.

Once the court takes ownership, it will sell those assets to get money that will repay your creditors. Do note that this generally happens in a Chapter 7 only. In Chapter 13, you still have exemptions, but any non-exempt property requires payments from you as part of your plan. For example, if you have a vehicle that you are still paying on and that is not exempt, then you will need to repay that debt under your plan.

It is also important to note that exemptions typically do not offer you a high value of assets.  For example, you will not be able to exempt a vehicle worth $15,000 because the exemption amount is only $2,400. The same is true for other exemptions, especially any cash you have in bank accounts or other places. You have a limit that you can keep. Anything above that, you must turn into the court as non-exempt.

Do note that you may apply multiple exemptions to one asset, so there are ways around the limits in some cases. Figuring your exemptions is a tricky process that requires knowledge of the law. This information is for education and is not legal advice.