Crestwood homeowners tend to have something worth protecting. Oldham County has the highest median household income in Kentucky. Homes here have held their value.
That equity is exactly what people are afraid of losing. Handled correctly, most of it stays yours. Nick Thompson is a Crestwood bankruptcy attorney and explains how in a free consultation. He practices as a Louisville bankruptcy and foreclosure attorney across six Kentucky counties.
Call 502-625-0905 for a free consultation.
Kentucky protects $5,000. Federal law protects $31,575.
Kentucky is one of the states that lets you choose. You can use the Kentucky bankruptcy exemptions or the federal list. You cannot mix them.
The Kentucky homestead exemption protects $5,000 of equity in your home. It is one of the lowest in the country.
The federal homestead exemption protects $31,575. A married couple filing together protects $63,150. Those figures apply to cases filed between April 1, 2025 and March 31, 2028.
For a Crestwood house, that gap decides whether a Chapter 7 works. This is the single most important calculation on your file, and it is the first one we run.
When equity runs past the exemption
Sometimes the number is still too big. A house with $120,000 of equity does not fit inside $63,150.
That does not mean you lose the house. It means Chapter 7 is the wrong tool.
In a Chapter 13 repayment plan, you keep the property and pay unsecured creditors at least what they would have received if the house had been sold. You pay that over three to five years, from income, on a schedule. The house never goes on the block.
We tell you which side of that line you fall on before you file, not after.
Second mortgages and home equity lines
Plenty of Crestwood households carry a second mortgage or a HELOC taken out during a stronger market.
If your home is now worth less than what you owe on the first mortgage, a Chapter 13 can strip the second loan off the property. Lawyers call that lien stripping and mortgage avoidance. The second lender gets treated as an unsecured creditor. At the end of a completed plan, that lien comes off.
The test is strict. The first mortgage balance has to equal or exceed the current value of the home. We order a valuation and check before promising anything.
Retirement savings
Tax-exempt retirement accounts are generally protected in full. That covers a 401(k), a 403(b), and most pensions.
Traditional and Roth IRAs are protected up to $1,711,975 under Section 522(n) of the Bankruptcy Code. That cap is set for cases filed from April 1, 2025 through March 31, 2028.
People in Crestwood often drain a retirement account to hold off creditors before they call a lawyer. That is usually backwards. The account was protected. The credit card debt was not.
What filing stops
The automatic stay begins the day you file personal bankruptcy in Kentucky. It stops wage garnishment, collection calls and letters, repossession, and a scheduled foreclosure sale. Most lawsuits stop as well.
Filing from Crestwood
Oldham County cases go to the Louisville Division of the U.S. Bankruptcy Court for the Western District of Kentucky, at 601 West Broadway.
You will not have to make the drive down I-71. Your 341 meeting of creditors is held by Zoom video, so you attend from home.
Foreclosure is different. The mortgage foreclosure defense side runs through Oldham Circuit Court, and sale notices are published in the Oldham Era and posted at the county courthouse in La Grange.
Serving Crestwood
Crestwood had 6,183 residents at the 2020 census. It started as Beard’s Station in 1857 and took its current name in 1909.
We take cases from across south Oldham County, including the neighborhoods around Maples Park and South Oldham High School, and out along KY 146.
Who handles your case
Nick Thompson has practiced law since 1988 and in Kentucky since 1991. He holds U.S. Tax Court License #51. He prepares every petition himself.
The office is open Monday through Friday, 9 AM to 5 PM Eastern. Call 502-625-0905 for a free consultation.
Frequently Asked Questions
Will I lose my Crestwood house if I file?
Do you serve Crestwood and south Oldham County?
Can bankruptcy remove a second mortgage?
Is my 401(k) at risk?
What are your office hours?
Talk to a Bankruptcy Attorney
Call 502-625-0905 or visit the office at 800 Stone Creek Parkway, Suite 6, Louisville, KY 40223.