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 case is a “no asset” case in which 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 bankruptcy exemptions. Each spouse gets the exemptions, so in a joint case the exemptions are effectively doubled. (The amounts shown are indexed to inflation and increased automatically on August 1, 2022.)


 Type of Property
 Federal Bankruptcy Exemptions
 Minnesota Exemptions
 Homestead  $27,900  $480,000
 Motor vehicle  $4,450  $5,200
 Household goods & clothing  $14,875  $11,700
 Jewelry  $1,875  $3,185 (wedding rings and watches only)
 Tools of trade  $2,800  $13,000
 “Wild card”exemption consisting of unused home exemption  $13,950 plus $1,475  None
 Life insurance
 Exempt if needed for your support  $52,000 plus $13,000 for each dependent
 Life insurance cash value  $14,875  $10,400
 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 with certain limits


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.