What Assets are Exempt in an Indiana Bankruptcy or a Kentucky Bankruptcy?
The bankruptcy laws are federal laws, and bankruptcy proceedings take place under federal bankruptcy court jurisdiction. In a Chapter 7 Bankruptcy, the federal bankruptcy laws permit each state to elect to provide exemptions for assets that can be retained by individuals and couples in bankruptcy. This property is referred to as “exempt assets” because creditors are not entitled to seize these assets in a bankruptcy, so long as the specific assets have not been otherwise pledged as security (such as a car that is pledged as collateral for a car loan).
Indiana Exempt Property Rules
The rules that govern exempt assets in Indiana are complicated. Under Indiana statutes, many types of personal property and real estate may be exempt, including:
- Tangible personal property (such as household items and clothing),
- An interest in real estate (up to a specified dollar amount),
- Professionally prescribed healthcare items,
- Interests in Healthcare Savings Accounts and Medical Care Savings Accounts,
- Qualified tuition accounts, and
- Retirement Accounts.
This is only a partial list of assets that may be exempt. As noted below, a list of all assets and the associated fair market value must be made before a determination can be made as to what assets are exempt.
Kentucky Exempt Property Rules
Kentucky law permits individuals to choose between the exemptions provided under Kentucky law or federal law. In general, the exempt assets may include equity in vehicles (up to a specified dollar amount), equity in a homestead (up to a specified amount), and other personal property. As with Indiana law, Kentucky and federal law concerning bankruptcy exemptions are also complex; as experienced Kentucky bankruptcy lawyers we can help you understand which of your assets may be exempt once all of your assets have been identified and the fair market value has been determined.
Important Limitations on Exempt Assets in Indiana and Kentucky
The above lists are only a partial list of assets that may be exempt; other exemptions may also apply to your case. It is important to understand that for many categories of assets, the total exemption is limited to a specific dollar amount. If the assets in a category have a fair market value in excess of the exempt amount, the fair market value that exceeds any limitation is not exempt. In some cases, there also may be other limitations concerning exempt assets.
As a result, a determination of which assets may be exempt (and the extent of the exemption) cannot be made until all assets are identified and the fair market value has been determined.
Once this process is done, we can advise you as to what exemptions will be applicable under the bankruptcy statutes so that you can maximize the exemptions that may be available in your case.
Call Us to Find out More About Exempt Asset Provisions Under Indiana and Kentucky Bankruptcy Law
As experienced bankruptcy lawyers, we can meet with you and explain the asset exemptions that may be applicable in your case. With more than 100 years of history, we will be there for you when you need us.
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