Exemptions determine what property you get to keep when you file bankruptcy. Understanding them is critical -- they can mean the difference between keeping and losing your home, car, and savings.
Bankruptcy exemptions are laws that protect certain property from being taken to pay your creditors. In Chapter 7, non-exempt property can be sold by the trustee. In Chapter 13, the value of non-exempt property affects how much you must pay through your plan.
Minnesota allows you to choose between state exemptions and federal exemptions. Many filers benefit from the state exemptions due to the generous homestead.
Protects $450,000 of equity in your primary residence. Equity is your home's current market value minus what you owe on the mortgage.
Minn. Stat. 510.01-.02
Protects $5,000 ($10,000 if used for work) of equity in your motor vehicle. If you owe more than the car is worth (you are "underwater"), there is no equity to protect and the exemption is not needed.
Minn. Stat. 550.37
| Property | Minnesota Exemption | Statute |
|---|---|---|
| Homestead | $450,000 (up to half-acre urban / 160 acres rural) | Minn. Stat. 510.01-.02 |
| Vehicle | $5,000 ($10,000 if used for employment) | Minn. Stat. 550.37 |
| Household goods | $10,800 total | Minn. Stat. 550.37 |
| Clothing | Unlimited (necessary clothing) | Minn. Stat. 550.37 |
| Tools of trade | $13,000 | Minn. Stat. 550.37 |
| Retirement accounts (IRA, 401k, pension) | Unlimited | Minn. Stat. 550.37 |
| Social Security benefits | Unlimited | 42 U.S.C. 407 |
| Wedding rings | Unlimited | Minn. Stat. 550.37 |
| Life insurance (cash value) | $9,200 | Minn. Stat. 550.37 |
| Public benefits | Unlimited | Minn. Stat. 550.37 |
Minnesota's homestead exemption protects $450,000 of equity in your primary residence. Equity is the difference between your home's value and what you owe on the mortgage.
Minnesota's motor vehicle exemption is $5,000. If your car equity is within the limit, you can keep it in Chapter 7. In Chapter 13, you can keep your car and catch up on payments through your plan.
Yes. Retirement accounts including IRAs, 401(k)s, and pensions are fully exempt in Minnesota. Social Security benefits are also fully exempt under federal law.
Minnesota protects Varies by category in personal property. Tools of trade up to $13,000. Health aids and Social Security benefits are fully exempt. See the complete table above.