Minnesota Bankruptcy Laws
The process of going through bankruptcy is protected by laws at the state and federal levels. These laws vary according to state and can be somewhat complex. Prior to deciding to file for bankruptcy, make sure you have all the information about how the laws will affect you. You can get answers by talking to a local bankruptcy lawyer. When you complete the free form on this page, you can get a free case evaluation with a lawyer in your area.
Under Minnesota bankruptcy laws, debtors can usually find protection from legal proceedings if they owe more than they can realistically repay.
Minnesota Bankruptcy Exemptions
Minnesota offers two bankruptcy exemption options. Under the federal exemptions, debtors may keep:
- Up to $20,200 for your home
- Up to $1,075 for any property as a wild card
- Up to $10,125 of the value of unused homestead exemption, applied toward other property
- Up to $20,200 for tools of the trade
- Up to $20,200 for personal injury compensation
- Up to $1,350 for jewelry
- Up to $3,225 for a vehicle
- Up to $10,775 in a loan value life insurance policy
- Up to $10,775 for household goods, $550 per item
- Alimony or child support
- ERISA qualified benefits and retirement benefits
- Life insurance contract that has not matured
- Wrongful death, crime victims’ compensation, or public benefits or compensation
- Life insurance payments you receive from someone you depended on, like a parent
- Health aids
- Lost earnings payments
Under Minnesota’s exemptions, debtors may protect:
- Up to $300,000 for a homestead, or $750,000 for a farm
- Up to $4,200 for a vehicle or $42,000 with modifications for the disabled
- Musical instruments
- Library
- Burial plot
- Up to $9,450 for clothing, a watch, food, furniture, appliances, phonographs, radio, TVs, and utensils
- Earnings for a minor child
- Up to $10,500 for tools of the trade
- Up to $13,000 for farm machines and implements
- All earnings not subject to garnishment
- Retirement, employee and public benefits
- Claims for damages
- Qualified life insurance, up to $42,000
- A manufactured home you live in
Keep in mind that you will need to reaffirm your car loan, if you have one, in order to keep your car. You also must make the loan current.
Minnesota Chapter 7 Bankruptcy Law
To file Chapter 7 bankruptcy, the form of bankruptcy that allows you to eliminate much of your debt, you must first pass the means test. If you do, then most debt will be eliminated after the court sells off your assets.
Minnesota Chapter 13 Bankruptcy Law
Chapter 13 bankruptcy works for those who do not qualify for Chapter 7 or have a strong desire to try to repay their debts. This form of bankruptcy requires the debtor to follow a repayment plan with court supervision in an attempt to pay down the debt in under five years.
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