Bankruptcy is a federal procedure so the process in every state will be nearly identical. Each state, however, has specific laws for bankruptcy practices in their own state.
Eligibility for Filing Bankruptcy in Minnesota
Eligibility for filing bankruptcy in Minnesota uses the federal bankruptcy means test to determine which chapter you can file. Your household income will be compared to the median Minnesota income of a household of your size. The latest numbers available from the United States Department of Justice for Minnesota households are:
- 1 person: $46,161
- 2 person: $61,170
- 3 person: $71,784
- 4 person: $84,251
If your household income is less than the Minnesota median, you are eligible to file chapter 7 or submit a shorter-term (3 year) repayment plan under chapter 13. Download our free Debt Solutions eBook for detailed information about the means test and specific chapter eligibility requirements.
Each state has its own set of property exemptions. In Minnesota, you may elect to use the federal bankruptcy exemptions or Minnesota’s exemptions.
Bankruptcy Form 6, Schedule C will ask you to claim any exempt property and cite the law that permits the exemption. The following exemptions can be complicated to understand due to the law jargon. A Minnesota bankruptcy attorney will be able to walk you through these forms and assist you in retaining the most property, under the exemption laws, you and your family require and desire to keep.
- MN Statute 510.01 and 510.02: Exemption - Home and land on which it is situated to $390,000; if used for agricultural purposes $975,000.
Cannot exceed ½ acre in city; 160 acres elsewhere
- MN Statute 550.37 subd. 12: Exemption - Manufactured home to an unlimited value
You must reside in Minnesota for at least 3 years and 4 months (40 months) before you can claim any homestead greater than $155,675.
- MN Statute 550.39: Exemption - Accident or disability proceeds
- MN Statute 64B.18: Exemption - Fraternal benefit society benefits
- MN Statute 550.37 subd. 10: Exemption - Life insurance proceeds to $46,000, if beneficiary is spouse or child of insured; plus $11,500 per dependent
- MN Statute 550.37 subd. 11: Exemption - Police, fire or beneficiary association benefits
- MN Statute 550.37 subd. 23: Exemption - Unmatured life insurance contract dividends, interest, or loan value to $8,800 if insured is debtor or person debtor depends on
Pension & Retirement Savings Exemptions:
- MN Statute 550.37 subd. 24: Exemption - ERISA – qualified benefits or needed support, up to $6,600 in present value
- MN Statute 550.37 subd. 24: Exemption - IRAs needed to support, up to $69,000 in present value
- MN Statute 353.15 and 356.401: Exemption - Public employees
- MN Statute 352.965 subd. 6 and 356.401: Exemption - State employees
- MN Statute 352B.071 and 356.401: Exemption - State troopers
Virtually all tax-exempt pensions and retirement savings accounts are exempt from bankruptcy. Additionally, “the law protects any pension or retirement fund that qualifies for special tax treatment under Internal Revenue Code sections 401, 402, 403, 408, 408A, 414, 457 or 501(a).”
Personal Property Exemptions:
- MN Statute 550.37 subd. 4(b): Exemption - Appliances, furniture, jewelry, radio, phonographs and TV up to $10,350
- MN Statute 550.37 subd. 2: Exemption - Bible and books
- MN Statute 550.37 subd. 3: Exemption - Burial plot; church pew or seat
- MN Statute 550.37 subd. 4(a): Exemption - Clothing, one watch, food and utensils for family
- MN Statute 550.37 subd. 12(a): Exemption - Motor vehicle to $4,600 (Up to $46,000 if modified for disability)
- MN Statute 550.37 subd. 22: Exemption - Personal injury recoveries
- MN Statute 550.37 subds. 9, 16: Exemption - Proceeds for damaged exempt property
- MN Statute 550.37 subd. 4(c): Exemption - Wedding rings or symbols to $2,817.50
- MN Statute 550.37 subd. 22: Exemption - Wrongful death recoveries
Tools of Trade Exemptions:
These items include those that are necessary to make a living.
- MN Statute 550.37 subd. 5: Exemption - Farm machines, implements, livestock, produce and crops up to $13,000
- MN Statute 550.37 subd. 8: Exemption - Teaching materials of college, university, public school or public institution teacher
- MN Statute 550.37 subd. 6: Exemption - Tools, machines, instruments, stock in trade, furniture and library up to $11,500
- MN Statute subd. 7: Exemption - Total value of Tools of Trade and Farm Machines combined cannot exceed $13,000
Public Benefits Exemptions:
- MN Statute 611A.60: Exemption - Crime victims’ compensation
- MN Statute 550.37 subd. 14: Exemption - Public benefits
- MN Statute 268.192 subd. 2: Exemption - Unemployment compensation
- MN Statute 550.38: Exemption - Veterans' benefits
- MN Statute 176.175: Exemption - Workers’ compensation
“Most states exempt public benefits, consistent with the notion that such benefits are intended as a safety net for the recipient.”
Wage Garnishment Exemptions:
- MN Statute 571.922: Exemption - Minimum 75% of weekly disposable earnings or 40 times federal minimum hourly wage, whichever is greater
- MN Statute 550.37 subd. 13: Exempion - Wages deposited into bank accounts for 20 days after depositing
- MN Statute 550.37 subd. 14: Exemption Wages, paid within 6 months of returning to work, after receiving welfare or after incarceration; includes earnings deposited in a financial institution in the last 60 days
- MN Statute 550.37 subd. 15: Exemption - Earnings of a minor child
When you file bankruptcy, regardless of state, you are required to complete credit counseling by an agency approved by the United States Trustee’s Office. Minnesota approved credit counseling agencies can be found here.
Additionally you must complete a debtor education course before you can complete your bankruptcy filing and receive a discharge. Here is a list of Minnesota agencies approved to provide this course.
Bankruptcy Courts in Minnesota
There are four bankruptcy courts in Minnesota and which court you file with will depend on the county in which you reside. Some counties (marked with an asterisk in the table below) have a choice between two courts because they lie close to cut-off boundaries.
Duluth Bankruptcy Court:
- Crow Wing
- Mille Lacs*
- St. Louis
Fergus Falls Bankruptcy Court:
- Big Stone
- Lake of the Woods
- Otter Tail
- Red Lake
Minneapolis Bankruptcy Court:
St. Paul Bankruptcy Court:
- Blue Earth
- Lac Qui Parle
- Le Sueur
- Mille Lacs
- Yellow Medicine
To begin the bankruptcy process, consult a Minnesota bankruptcy attorney.