Types and Costs of Bankruptcy

• When filing for bankruptcy in Kentucky, you must first choose from among the available bankruptcy chapters. For individual debtors, Chapters 7 and 13 are the most commonly used. Chapter 7 requires you to surrender any property that is not protected by Kentucky bankruptcy exemptions in exchange for your discharge. Chapter 13 lets you keep your property but requires up to five years of payments to creditors. If you file Chapter 7 you must pay a $299 filing fee in addition to legal fees if you retain an attorney. A Chapter 13 costs $274 to file.
  
  

Qualifying for Bankruptcy in Kentucky

• To qualify for Chapter 7 bankruptcy in Kentucky, you must have an annual income below the Kentucky median income for a household of your size. For example, if you are single and have an annual income of $24,000 you qualify for Chapter 7, as the median income for a one-person household in Kentucky is $36,999. Median incomes for two-, three- and four-person households are $44,353, $51,046 and $62,739 respectively. If your income is above this median figure, you can still qualify if you pass the means test, which determines if you have enough monthly disposable income to afford a Chapter 13 payment plan.
  
  

Kentucky Bankruptcy Districts

• You must file your bankruptcy petition in the correct Kentucky bankruptcy district if you want your case to be heard. Kentucky has two bankruptcy districts, the Eastern and Western Districts. The Eastern District has six courthouse locations, while the Western District has four.
  
  

Kentucky Bankruptcy Exemptions

• To protect your assets in a Chapter 7 bankruptcy case, you must list them on Schedule C of your bankruptcy petition. Kentucky allows you to exempt assets in nine categories ranging from tools of the trade to personal property. If your assets exceed the value allowed by the state, you may have to give them to your bankruptcy trustee who will sell them for the benefit of your creditors. If you file a Chapter 13 bankruptcy petition, you do not need to specifically exempt any assets on your bankruptcy schedules because in exchange for your payments your assets are not subject to seizure by the court.