You no doubt have certain assets you wish to protect from creditors when you file for bankruptcy; property such as your home, your car or certain household goods.
There are many more possibilities for bankruptcy exemptions. There is no Wild Card option in Minnesota, but you can choose to use either federal or state exemptions.
An exemption limit applies to the equity on any kind of property you wish to exempt from your bankruptcy proceeding. For example, if you have a vehicle with a value of $6,000 but you still owe $5,000, the equity value is $1,000, representing the difference between the value of the car and the loan amount remaining. Keep in mind that if you are current on your auto loan payments and the exemptions cover the built-up equity, you may continue making payments if you wish.
Examples of Minnesota exemptions
In addition to real estate or homestead exemptions up to $390,000 in value, here are examples of items you may be able to protect from creditors:
- Disability or accident proceeds; life insurance proceeds
- Property of a business partnership
- IRAs needed for support
- Private retirement pensions; pensions for public or state employees or state troopers
- Household appliances, furniture, radios and TVs to a value of $7,200
- Personal injury or wrongful death recoveries
- Tools of your trade, such as farm machinery or teaching materials
- Wages of a certain description, such as earned but unpaid
When filing jointly
If you and your spouse elect to file bankruptcy jointly, you are each entitled to a full listing of exemptions. However, whether you file jointly or individually, your bankruptcy attorney can explain the benefits of federal versus state exemptions based on your circumstances. Wondering what kind of property you will have to give up to satisfy your debts is an uncomfortable feeling at best, but when you can keep certain assets from liquidation, the bankruptcy process will seem less intimidating.