The Most Common Exemptions Allowed Through Bankruptcy Code in Luverne, MN

When you file for Chapter 7 bankruptcy as an individual, some of your non-exempt assets may be liquidated in exchange for a discharge of your debts. While this is always a possibility, in most chapter 7 bankruptcy cases people don’t lose anything other than their debts.  This is because part of filing for individual consumer bankruptcy relief is taking advantage of various generous bankruptcy exemptions provided either under the federal bankruptcy code or under state law to protect your property.  Exemptions are allotted value amounts that can be used to protect the equity or value you have in your property.

Bankruptcy Code

In Minnesota, filers can choose either the Minnesota state exemptions or the federal bankruptcy code exemptions, but they aren’t allowed to mix and match between the two. For some filers, Minnesota exemptions might be more beneficial than the federal exemptions and vice versa. If you’re considering filing any kind of individual consumer petition, Behm Law Group Ltd. can help you navigate the nuances of the bankruptcy code in Luverne, MN, and the local area to build a strong case. Our attorneys provide legal protection and aid so you can effectively find long-term debt relief through bankruptcy.

Commonly Claimed Exemptions

There are many ways individual asset exemptions can apply in a chapter 7 liquidation process, but the most commonly claimed exemptions include:

  • Homestead: The homestead exemption protects your primary place of residence. Currently, the exemption amount in Minnesota is a maximum value of $420,000 for non-agricultural land. Agricultural land of up to 160 acres can be exempted up to $1,050,000 if it’s being used for farming purposes.  A rental property, such as an apartment building that you may own, can also be exempted if you are using part of it as your primary place of residence.  Under the federal bankruptcy exemptions, a person is allowed $25,000 to protect one’s primary place of residence.  If two married people file for bankruptcy relief, and provided they both are listed as owners of the homestead, each one would be able to claim $25,000 for a total of $50,000.
  • Motor vehicle: For vehicles that are the primary household car, such as one you use to drive to work or drive your children to school, you can exempt $4,600 per person. You can also exempt up to $46,000 if that vehicle has been adapted to accommodate disabilities. Under the federal bankruptcy exemptions, a person is allowed $5,000 to protect the value in a vehicle.
  • Personal property: Additional personal items like clothing, furniture, appliances, and food can be exempted in varying amounts. In Minnesota, for example, you can exempt appliances and furniture up to $10,350 and wedding rings up to $2,817. Under the federal bankruptcy exemptions, each person is allowed $13,400 to protect one’s personal property and $1,700 for one’s jewelry.
  • Tools of the trade: Farm equipment and other “tools of the trade” can also be exempted given your occupation. If a certain portion of your income is from your trade, the court wants you to protect the necessary tools from liquidation so you can continue using them to make a living. For farm equipment, Minnesota allows $13,000 to be exempted and $11,500 for any other non-farm tools of the trade. Under the federal bankruptcy exemptions, a person is only allowed $2,525 to protect one’s tools of the trade.
  • Wages: If you file for bankruptcy, some of your wages may be at risk of liquidation. For unpaid wages, the State of Minnesota exemptions allow you to protect 75% or 40 times the federal hourly minimum wage. Your wages will be exempted up to three times those amounts (whichever is greater).
  • Wildcard (federal): The Minnesota state exemptions don’t offer a wildcard exemption provision, but if you claim federal exemptions, you could be allowed $13,900 for a wildcard exemption that you could use to protect any asset. That amount may be dependent on what you choose to apply the exemption to. Learn more here.

To learn more about the bankruptcy code in Luverne, MN, and about filing a bankruptcy case, contact Behm Law Group Ltd. by calling (507) 387-7200 or by emailing