MINNESOTA BANKRUPTCY LAW

Minnesota Bankruptcy: Attorneys, Statistics, Exemptions and Courts.

Minnesota Bankruptcy Statistics: In Minnesota, 21,456 bankruptcies were filed in 2009. Out of the total, business bankruptcies accounted for only 859 or 4% of the bankruptcies.

NOTE: The Minnesota bankruptcy laws include a provision for making regular adjustments to the monetary limits of the exemption. The amounts listed below change every year on April 30th. The amounts on this list are accurate as of March 2010.

Homestead

The homestead is defined as the home where the debtor resides and the land that the home stands on. The following limitations apply to the homestead exemption: the land may not exceed ½ acre in the city and 160 acres elsewhere. The value of the home may not exceed $300,000 or when the home is used primarily for agricultural purposes, the value may not exceed $900,000.

A manufactured home, defined as a home transported in sections to its final location, rather than build on site is wholly exempt.

Personal Property

NOTE: Damages recovered for loss of exempt property are also exempt.

The following items are entirely exempt when filing bankruptcy in Minnesota:

1. Bible and other books
2. Burial Plot
3. Church pews or seats
4. Damages recovered for personal injury claims of debtor or relative of debtor
5. Damages recovered for wrongful death claim of relative of debtor

The following exemptions are subject to limitations:

1. A motor vehicles is exempt up to $4,400; however if the vehicle has been modified for the purpose of accommodating an individual with a disability, the vehicle may be exempt for up to $44,000
2. Wedding rings or other culturally or religiously recognized symbols of marriage are exempt up to $2,695

The following items may be exempt for a total of $9,900:

1. Clothing
2. One watch
3. Utensils
4. Foodstuff
5. Household furniture
6. Household appliances
7. Television

Insurance

In a Minnesota bankruptcy, un-matured or unvested life insurance contracts, dividends, interest or loan value are exempt for up to $8,800, when the insured is a debtor or a person the debtor depends on. Life insurance proceeds are exempt for up to $44,000, when the beneficiary is the spouse or child of the insured. The $44,400 is increased by $11,000 for each depended of the beneficiary.

The following insurance policies are entirely exempt: accident or disability proceeds; fraternal benefit society benefits; police, fire and beneficiary association benefits.

Pensions

Federal pension exemptions apply in Minnesota bankruptcy proceedings.

ERISA-qualified pensions, IRAs and Roth IRAs are exempt up to $66,000. An additional amount may be exempt when needed for the support of the debtor or dependents of the debtor.

The following individuals’ pensions are entirely exempt; public employees, state employees, state troopers.

Public Benefits

The following public benefits are entirely exempt:

1. Crime victims’ compensation
2. Public benefits received biased on need
3. Unemployment compensation
4. Veterans benefits
5. Workers’ compensation

Tools of the trade

Tools used in farming are exempt for a total of $13,000. Tools used in a trade or a profession are exempt for a total of $11,000 (ex: tools, implements, machines, instruments, office furniture, stock in trade and books). Together farming tools and trade or professional tools may be exempt for a total not exceed $13,000.

Materials used by university professors or school teachers for instructional purposes are entirely exempt.

Miscellaneous

Earnings of a minor child or any child support received on behalf of the child are exempt when filing bankruptcy in Minnesota.

Wages

Wages deposited in a bank account are exempt for 20 days after depositing when filing bankruptcy in Minnesota.

Other wages are exempt at either 75% of the weekly disposable earnings or 40 times the federal minimum wage, whichever is greater.

Wages earned by an individual receiving income based public assistance are entirely exempt. Wages received after public assistance and incarceration continue to be exempt for six months after the debtor returns to work. The exemption includes earnings deposited into a financial institution in the 60 days before filing for bankruptcy.

Qualifying public assistance includes, but is not limited to: Minnesota family investment program, general assistance medical care, Supplemental Security Income, medical assistance, MinnesotaCare, payment of Medicare part B premiums or receipt of part D extra help, MFIP diversionary work program, work participation cash benefit, Minnesota supplemental assistance, emergency Minnesota supplemental assistance, general assistance, emergency general assistance, emergency assistance or county crisis funds, energy or fuel assistance, and food support.

Federal Bankruptcy Exemptions: Yes

Minnesota Bankruptcy Courts:

Minnesota Bankruptcy District Court has jurisdiction in the entire state.