What are the Federal Bankruptcy Exemptions in Minnesota and Which Assets are Protected?

When filing either chapter 7 or chapter 13 bankruptcy, each individual debtor is allowed to exempt a limited amount of equity in real property, cash, personal assets and other property while still obtaining a discharge of most debts. Only when a debtor exceeds the available exemptions will they have “non-exempt” assets that will either be liquidated in chapter 7 or, alternatively, the debtor will effectively pay to keep over the duration of a chapter 13 plan.

Bankruptcy exemption law allows for the exclusion of certain assets from the bankruptcy estate and, thereby, protects such assets from the reach of either creditors or the bankruptcy trustee. When filing bankruptcy in Minnesota, a debtor elects to utilize either the federal exemptions or the Minnesota state exemptions. Since the federal exemptions offer a general catchall “wildcard” exemption that is favorable for most bankruptcy filers, a Minnesota debtor will usually only elect state exemptions when they have over $27,900 (or $55,800 for joint filings) in equity in a homestead (or, less commonly, a significant certain asset such as pending insurance proceeds or personal injury award). Most debtors however opt to use federal exemptions for the availability of up to a $15,425 “wildcard exemption” which can be used to protect any assets which are not otherwise protected under a separate federal exemption.

As of the date of this post, the federal exemptions provide for the following amounts per debtor:

* These amounts are valid as of 2023, as last adjusted April 1, 2020, and adjust periodically. You should consult a bankruptcy attorney to analyze the available exemptions for your particular circumstances.