Whether you choose to file for Chapter 7 or Chapter 13 bankruptcy, the properties you own and the debts you owe will be subject to the bankruptcy process. In the case of Chapter 7, this means your properties (assets) can be liquidated in order to repay your creditors’ claims unless you use your bankruptcy exemptions to protect your property from liquidation. In a Chapter 13 case, the risk of losing assets to liquidation isn’t as significant like in Chapter 7, but your exemptions come into play to determine the amount you must pay back in a restructured payment plan. Behm Law Group, Ltd. can help you navigate the complicated process of claiming exemptions when you file for bankruptcy in Marshall, MN.
In both Chapter 7 and Chapter 13, the exemptions you can claim are the same. The amount of each exemption you claim regarding a particular asset depends on the amount of debt you owe against that asset. Depending on the value of the asset and the amount of debt against it, you can protect equity (the value of the asset that exceeds the debt against it) in the asset from liquidation in a Chapter 7 case and keep the property involved. Of course, you must still pay the underlying debt against that asset. In a Chapter 13 case, you can use exemption amounts to determine the minimum amount you must pay in your repayment plan.
In Minnesota, a filer may choose to use state or federal exemptions in one’s case depending on which is most beneficial. The limits for the most commonly claimed Minnesota exemptions include:
Homestead: Exemptions on standard residences and land up to a maximum of $390,000, and exemptions on agricultural land spanning up to 160 acres up to a maximum of $975,000.
Motor Vehicle: You may exempt a maximum of $4,600 for your motor vehicle or up to $46,000 for a vehicle modified for disabilities.
Insurance: You can claim up to $46,000 on insurance benefits from the death of a spouse or a parent, including another $11,500 for each of your dependents.
Employee Benefits: A maximum of $69,000 of present and future employee payments can be exempted in your bankruptcy case, including wages, stocks, pensions, or IRAs.
Personal Property: You may automatically exempt essential items including clothing, food, utensils, and one watch. You may also exempt up to $10,350 on appliances and furniture, up to $2,817.50 on wedding rings, up to $11,500 on your tools of trade, and up to $13,000 on farm equipment.
Wages: Your wages during a bankruptcy case and full repayment plan period are protected up to 75% or 40 times the federal hourly minimum wage. Whichever of these values is greater is the amount that will be exempt in your bankruptcy case.
The exemptions you can claim in any type of bankruptcy case can impact the outcome for both you and your creditors. If you have questions about how exemptions can work for you or to learn more about the different types of bankruptcy in Marshall, MN, contact Behm Law Group, Ltd. today at (507) 387-7200.