Exemption Amounts Increased April 1st 2019

By: Laura Day DelCotto

Under the Bankruptcy Code, every 3 years, certain debt limits and the exempt assets limits increase.  This is done to keep up with inflation.  The amounts recently were raised for all cases filed after April 1. 

Most of our individual clients ask about what they may get to keep if they are forced to file for bankruptcy, as well they should.  Everyone considering a bankruptcy filing should educate themselves about all of the consequences, including exemptions. 

In Kentucky, each debtor may elect to choose between the federal exemptions in Section 522 of the Bankruptcy Code, or the state exemptions found in KRS Chapter 427.  Most often, federal exemptions are more favorable, but not always, so this is something you should make sure your bankruptcy attorney has analyzed in your own situation. 

Some examples of the increase include the “homestead” (equity in your residence over and above any mortgages) which was increased from $23,675 to $25,150 (522(d)(1)).  Maximum aggregate IRA  limits increased from $1,283,025 to $1,362,800 (522(n)), which is in addition to any 401(k) amounts, which are fully exempt under Section 522(d)(12).  We have long advised and still see too many borrowers who have used retirement accounts to pay debt, when it should be preserved for retirement and is exempt from creditors.  Saving to your retirement accounts is an important asset protection strategy. 

About DelCotto Law Group

DelCotto Law Group is Kentucky’s asset protection law firm known for its commitment to the lifetime success of its clients. With offices located in Lexington, Louisville and Danville, DLG serves Kentuckians with complicated financial matters, especially in the areas of bankruptcy, complex litigation, and estate planning. For more information about filing bankruptcy or DelCotto Law Group, please call (859) 231-5800 or email info@dlgfirm.com.

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