Minnesota Bankruptcy Exemptions

You can protect property in a Minnesota bankruptcy using either Minnesota's exemption laws or federal exemptions.

Updated February 7, 2019

You won’t lose all of your assets when filing for bankruptcy in Minnesota. You can use Minnesota’s bankruptcy exemptions to protect property you’ll need to work and maintain a household, such as furnishings, clothing, and a retirement account.

Your other choice—using the federal bankruptcy exemptions—could provide more protection, depending on the assets you own.

Learn more about filing a Minnesota bankruptcy.

Minnesota Exemptions v. Federal Bankruptcy Exemptions

Some states, including Minnesota, allow residents to choose between the state and federal bankruptcy exemptions. You can’t protect property by using exemptions from both lists—you must pick the system that will work best for you. If you elect to use Minnesota’s state exemptions, the federal nonbankruptcy exemptions will be available to you, too.

Common Minnesota Bankruptcy Exemptions

Here are some of the more common exemptions in Minnesota. When reviewing them, you’ll want to keep these things in mind:

  • Joint filing. Unless otherwise noted, when spouses file together in Minnesota, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
  • Legal citations. You’ll find each of the statutes in the Minnesota Statutes or the federal law.

Minnesota Homestead Exemption

510.01 & 510.02 & 550.37 – Equity up to $420,000 for a home and the land on which it’s situated. The exemption amount increases to $1,050,000 if used primarily for agriculture, but the size can’t exceed 160 acres. Also, spouses can’t double the exemption. You can fully exempt a manufactured home.

Minnesota Motor Vehicle Exemption

550.37 – Equity in a motor vehicle up to $4,800. The amount increases to $48,000 if the vehicle is modified for use by a person with a disability.

Minnesota Wildcard Exemption

None.

Other Minnesota Exemptions

Personal Property

550.37 - Clothing, food, utensils, and watches; furniture, appliances, radio, TV, and photographs, up to $10,800 total; books; burial plot; church pew or seat; proceeds for damaged or destroyed exempt property; personal injury and wrongful death recoveries; wedding rings up to $2,940.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) — IRAS and Roth IRAs to maximum (amount changes).

353.15 - Public employees.

352.15(1) - State employees.

352B.071 - Highway patrol.

550.37(24) – Employee benefits up to $72,000.

Public Benefits

176.175(2) - Workers' compensation.

268.192(2) - Unemployment compensation.

550.37 - Public assistance.

550.38 - Veterans' benefits.

611A.60 - Crime victims' compensation.

Tools of Trade

550.37 - Tools, library, furniture, machines, instruments, implements, and stock up to $12,000; farm machines, implements, livestock, produce and crops of farmers up to $13,000. Teaching materials of a university, college, public school or public institution teacher of unlimited value.

Insurance

64B.18 - Fraternal benefit society benefits.

550.37 - Life insurance proceeds if beneficiary is spouse or child, up to $48,000 plus additional $12,000 per dependent; unmatured life insurance contract dividends, interest, loan, cash, or surrender value if insured is the debtor or someone the debtor depends upon up to $9,600; police, fire, or beneficiary association benefits.

550.39 - Disability proceeds.

Other

550.37(26(a)) – Health savings account to $25,000.

550.37(26(b)) – Medical savings account to $25,000.

550.37 - Earnings of a minor child.

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a Minnesota Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Minnesota Exemptions

This list includes the majority of bankruptcy exemptions available in Minnesota, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Minnesota Statutes or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

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