Bankruptcy

Can I Keep My Property If I File for Bankruptcy in Minnesota?

By Cara O'Neill, Attorney
Learn about bankruptcy exemptions in Minnesota.

January 23, 2017

If you file for bankruptcy in Minnesota, it’s likely that you—like many filers—will be able to keep (exempt) most, if not all, of your property. You’ll find the property that you can protect described in the Minnesota exemption statutes.

Exempt Property in Minnesota

If you file for bankruptcy in Minnesota, you’ll be able to choose between the state exemption scheme and the federal exemption list (a handful of states allow residents to make a choice between the two systems). Although you won’t be able to choose items off of both lists, if you select the state exemptions, you’ll also be able to use the federal “nonbankruptcy” exemptions to protect valuable assets, such as a qualified retirement plan, wages, and public benefits.

The Process of Exempting Assets

You’ll protect your property by taking steps to claim exempt property. Specifically, you’ll list exempt assets on official bankruptcy form Schedule C: The Property You Claim as Exempt.

“Nonexempt” property isn’t covered by an exemption. The bankruptcy trustee will sell it in a Chapter 7 bankruptcy and distribute the proceeds to creditors.

In a Chapter 13 matter, you can keep your nonexempt property as long as you can pay for its value in a three- to five-year repayment plan. (You can learn more in the article Choosing the Type of Bankruptcy: Chapter 7 or 13.)

Minnesota Property Exemptions

You’ll find some of the most frequently-used state exemptions below (as of January 2017). A couple who files jointly (together) can double most exemption amounts. The text of each exemption (with conditions) is located within the Minnesota Statutes (Minn. Stat.) on the website of the Minnesota Revisor of Statutes.

Homestead

  • Residential homestead—$390,000; spouses cannot double the exemption amount. (§§ 510.01, 510.02)
  • Farmland homestead—$975,000; must be used primarily for agriculture; spouses cannot double the exemption amount. (§§ 510.01, 510.02)
  • Manufactured home—no limit. (§ 550.37 subd. 12)

Wages and Support

  • Wages of inmates (§ 241.26(6))
  • Earnings—75% or 40 times federal minimum wage, whichever is less. (§ 550.37 subd. 13)
  • Minor child earnings—unlimited. (§ 550.37 subd. 15)

Household Furnishings, Jewelry, and Clothing

  • Clothing—includes a watch, plus food and utensils. (§ 550.37 subd. 4(a))
  • Household furnishings—$10,350; includes furniture, appliances, and electronics. (§ 550.37 subd. 4(b))
  • Wedding rings—$2,817.50. (§ 550.37 subd. 4(c))

Motor Vehicle

  • Motor vehicle—$4,600. (§ 550.37 subd. 12a)
  • Motor vehicle—$46,000; must be modified for an individual with a disability. (§ 550.37 subd. 12a)

Tools of the Trade

  • Farm machinery—$13,000. (§ 550.37 subd. 5)
  • Tools of the trade—$11,500 worth of equipment and books necessary for a trade or profession. (§ 550.37 subd. 6)
  • Teachers’ library and equipment (§ 550.37 subd. 8)

Retirement Accounts, Pensions, and Other Benefits

  • Workers’ compensation benefits (§ 176.175(2))
  • Unemployment benefits (§ 268.192(2))
  • State employee retirement (§ 352.15(1))
  • Highway patrol retirement (§ 352B.071)
  • Public employee retirement (§ 353.15)
  • Teacher retirement (§§ 354.10, 354A.11)
  • Minneapolis employee retirement benefits (§ 422A.24)
  • Firefighter and police benefits (§ 423A.16)
  • Judge’s retirement benefits (§ 490.126)
  • Public assistance (§ 550.37 subd. 14)
  • Employee benefits—$69,000 plus additional amount reasonably necessary for support. (§ 550.37 subd. 24)
  • Veteran benefits (§ 550.38)
  • Disability benefits (§ 550.39)

Insurance

  • Life insurance or endowment proceeds, including cash or surrender value (§§ 61A.04, 61A.12)
  • Fraternal society benefits (§ 64B.18)
  • Insurance benefits—$46,000; $11,500 for additional dependent benefits. (§ 550.37 subd. 10)
  • Police, fire department, or fraternal society benefits (§ 550.37 subd. 11)
  • Insurance policies—$9,200. (§ 550.37 subd. 23)

Miscellaneous

  • National Guard equipment (§ 192.25)
  • Cemetery property (§ 307.09(1))
  • Certain partnership property (§ 323A.0307)
  • Health savings account funds (§ 352.98 subd. 8)
  • Notary seal (§ 359.03)
  • Family Bible or library (§ 550.37 subd. 2)
  • Musical instruments (§ 550.37 subd. 2)
  • Pew and burial plot (§ 550.37 subd. 3)
  • Claims for exempt property (§ 550.37 subd. 9)
  • Personal injury claims (§ 550.37 subd. 16)
  • Real estate improvement payments (§ 550.37 subd. 25)
  • Crime victim compensation (§ 611A.60)
  • Bail (§ 629.53)

Additional Minnesota exemptions exist and are subject to conditions and to change. A local bankruptcy attorney can review your property and exemptions for appropriateness.

Questions for Your Attorney

  • How much property will I lose, if any, if I file for Chapter 7 bankruptcy?
  • How much would my monthly payment be if I file a Chapter 13 case?
  • Would filing for bankruptcy be in my best interest?
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