Q: Can my inherited home be taken if I file for bankruptcy in Kentucky?
I am considering filing for bankruptcy. My father passed away in September 2023, and his estate just settled. I have received his home, valued at $25,000, which needs repairs and has no water. There is no debt or lien on it. I haven't officially transferred the title yet. Can this home be taken from me if I file for bankruptcy in Kentucky? Additionally, there is an old F150 truck from the estate that is not in working condition.
A: You have a 27,900 exemption that allows you to keep up to 27900 in equity in your home you live in. It must be your residence. You also have a 4500 exemption for a car. If you live in the home and the truck is in your name you should have no problem.
Timothy Denison agrees with this answer
A: Yes, although you may be able to protect it with your federal or state exemptions but you should absolutely consult a bankruptcy lawyer regarding your entire financial situation before you do anything.
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A:
If you file for bankruptcy in Kentucky, your inherited home could be at risk, but it depends on the type of bankruptcy you choose and the exemptions available. In a Chapter 7 bankruptcy, non-exempt assets can be sold to pay creditors, while in Chapter 13, you may be able to keep the home by restructuring your debts. Kentucky allows you to use either federal or state exemptions, and the federal homestead exemption may help protect some or all of the home’s value since it is relatively low at $25,000.
Because the home is not yet in your name, it is still considered part of the estate, but once transferred, it will be part of your assets. If you haven't transferred the title yet, the bankruptcy trustee could still view it as an asset that should be included in your case. The old F150 truck might also be considered property of the estate, but if it has little to no value due to its condition, it may not be of interest in a Chapter 7 case.
You should look at the exemption rules closely to see how much protection you have for the home and vehicle. If the home’s value falls within the exemption limits, you might be able to keep it. It would also be wise to think about whether a Chapter 13 repayment plan is a better option if you’re worried about losing assets.
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