Question about homestead exemption.

[lexfemale27]

Under the federal homestead exemption is says that you can use $10,825 that is left from the homestead exemption and apply it as a wildcard to protect other property. Can you use that exemption towards a second property? I'm married so can we double the homestead at $43,250. The home we live in has equity of $27,871, so that would leave $15379. So could we put that $15379 towards the $13,000 equity in a second home?

Thanks in advance for the advice, we really appreciate it.

[mlsj2009]

According to my research, it shows me Kentucky does not allow federal exemptions. State exemptions in Kentucky on homestead shows me they are unlimited, but they would need to be applied to your homestead only. I understand that to mean you would not get the exemption for your second property.
Please understand I am not a lawyer or giving advice here. That is what I found out with a quick search.
If you were in a state that allowed either federal or state exemptions, you make an interesting question.

Under the federal homestead exemption is says that you can use $10,825 that is left from the homestead exemption and apply it as a wildcard to protect other property. Can you use that exemption towards a second property? I'm married so can we double the homestead at $43,250. The home we live in has equity of $27,871, so that would leave $15379. So could we put that $15379 towards the $13,000 equity in a second home?

Thanks in advance for the advice, we really appreciate it.

[lexfemale27]

When I search, most info I find is that you can do either/or. Some do say that only Ky can be used. So confused...

[ValleYum]

Kentucky can use either exemption set.

http://www.legalconsumer.com/bankruptcy/laws/#Kentucky

I am not sure about covering the equity - but it does sound plausible... have you made any free consultation appointments with BK attorneys in your area? They will be 100% able to tell you what the local trustees will allow.

Good luck!

[LadyInTheRed]

The federal wildcard is provided by 11 USC 522(d)(5) which says:

(5) The debtor’s aggregate interest in any property, not to exceed in value $800 plus up to $7,500 of any unused amount of the exemption provided under paragraph (1) of this subsection.

http://www.law.cornell.edu/uscode/text/11/522

Paragrapn (1) is the homestead exemption. Note that the federal exemptions are adjusted based on inflation every 3 years, and the code quoted above is not amended to reflect the adjustments. The link provided by Valle Yum has the current federal amounts at the bottom of the page.

Defintely consult with some experienced BK attorneys who can advise you on how best to apply exemptons to your assets.

[lexfemale27]

Thanks for all the replies. We still need to speak to an atty, we are trying to file pro se because the funds just aren't there right now.

[LadyInTheRed]

Even if you file prose, you should take advantage of free consultations with a couple of BK attorneys.

I would be very hesitant to file prose when there are assets to protect. It's too easy to make a mistake that will cost you more in the long run. If you are not able to save the cash to pay an attorney, are you sure you don't have issues that a BK won't fix? Have you stopped paying unsecured creditors? That's a good way to come up with cash to pay an attorney.

[btbeme]

Filing pro se when a second property is at stake is a really big risk. What are your plans should the Trustee move to seize and sell the property?

I'd find a way to get an attorney on board. Search these forums for legitimate ways to pay for an attorney - there are a lot of posts.

I was once told by a great BK attorney that I would not like all of the answers I got when I asked him what I should do. It might be the same for you...consider closely whether that second property is really an affordable part of your post-BK plans.