Can I Keep My Property?
In a bankruptcy, you are allowed to keep your property and possessions, as long as those things are exempt under the law. In Minnesota, almost every consumer bankruptcy case is a “no asset” case, which means that you lose nothing you own.
If you thought bankruptcy would be unpleasant or painful for you, go back and read the above paragraph again.
The bankruptcy exemption laws focus on the fair market value of the things you own, not purchase price or replacement cost. If you owe money on the item, then the equity in the item is what must be exempted. You are allowed to select either the federal bankruptcy exemptions, or the Minnesota exemptions, but not both, and you may not mix them. The Minnesota exemptions were amended extensively in 2024, and the table below incorporates these amendments.
Each spouse gets the exemptions, which means that in a joint case, the exemptions are effectively doubled. In addition, the amounts shown below are indexed to inflation, and increased automatically on August 1, 2024.
| Type of Property |
Federal Bankruptcy Exemptions
|
Minnesota Exemptions
|
| Homestead | $27,900 | $510,000 |
| Motor vehicle | $4,450 | $10,000 |
| Household goods/electronics/computers | $14,875 | $12,150 |
| Jewelry | $1,875 | $3,062.50 |
| Tools of trade | $2,800 | $13,500 |
| “Wild card” exemption | $13,950 plus $1,475 | $1,500 |
| Life insurance proceeds |
Exempt if needed for your support | $54,000 plus $13,500 for each dependent |
| Life insurance cash value | $14,875 | $10,800 |
| IRA’s, ERISA pensions & 401(k)’s | $1,512,350 | $1,512,350 |
| Social security benefits | Exempt | Exempt |
| Child support | Exempt | Exempt |
| Spousal maintenance | Exempt if needed for support | Exempt as wages, 75% |
| Personal Injury Cases | $27,900 | Exempt |
| Health Savings Accounts | Exempt under (d)(5) | $25,000 |
| Motor vehicle used in business | $12,500 | |
| Household tools | $3,000 | |
| Motor vehicle for disability | $100,000 | |
| Personal library | $750 | |
| Sacred possessions | $2,000 | |
| Musical instruments | $2,000 | |
| Pets | $1,000 |
The table above is a good summary of the law, but the actual laws are more detailed and there are other exemptions.
Remember to discuss the exemptions with me to be sure about what is exempt in your case. Also, the law says that your assets are exempt only if you list them in your bankruptcy papers. If you leave out something, you can’t keep it even if it’s supposed to be exempt. It’s a bankruptcy crime to intentionally leave something off your bankruptcy papers.
Most people have no trouble keeping everything they own. Call my office to discuss how bankruptcy would protect your property.
