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Kentucky Homestead Laws

We’ve all felt a little financial pinch at one time or another, and for some of us, it may have been serious enough to wonder if we’d lose our house. Fortunately, many states have homestead protection laws that are intended to protect people from losing their homes in the unfortunate event of a bankruptcy. Under these statutes, a debtor can set aside a specific amount of real property, referred to as a "homestead," which would be off limits to certain creditors. Here is an introduction to homestead laws in Kentucky.

Homestead Statutes in Kentucky

Similar to state homestead laws, the Bluegrass State’s homestead statute, places a limit on the value or property that can be designated as a homestead at $5,000. Debtors are also allowed to protect $3,000 of personal property. The table below highlights the specifics of Kentucky’s homestead statutes.

Code Section

Kentucky Revised Statutes 427.010: Exempt Personal Property and Disposable Earnings of Individual Debtors;

Kentucky Revised Statutes 427.080: Valuation and Allotment of Homestead Exemption

Max. Property Value That May Be Designated 'Homestead'

$5,000 plus $3,000 in any personal property

Maximum Acreage (Urban)


Maximum Acreage (Rural)


State homestead protections aren’t absolute, however. There are four general exceptions to the homestead rule under which It is possible to be forced to sell or forfeit property:

  • If there was a pre-existing lien on the property before the establishment of homestead;
  • If the homestead property was specifically pledged as credit for a mortgage;
  • If you owe past due taxes to the State of Kentucky and Kentucky counties or municipalities; or
  • If you owe money to mechanics, contractors, or builders for work performed in repairing or improving the property.

Additionally, any federal income tax liens could be superior to Kentucky’s homestead exemptions. The Supremacy Clause of the United States Constitution makes state law subject to federal override. Even so, the Internal Revenue Service (IRS) has generally been reluctant to foreclose on citizens’ homes in order to collect on a tax debt. The IRS normally gets involved only if the homestead property is mortgaged or sold off before the federal tax lien expires.

Kentucky Homestead Laws: Related Resources

Real estate laws can be difficult enough to understand without combining them with bankruptcy laws as well. You can contact a Kentucky bankruptcy attorney or a Kentucky real estate attorney if you would like legal advice regarding a bankruptcy or real estate matter. You can also visit FindLaw’s section on Homestead Protections for additional articles and information on this topic.

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