BANKRUPTCY FACTS
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PRACTICE AREAS
- Divorce
- Bankruptcy
- Criminal/Misdemeanor Defense
- Family Law
- Commercial Litigation
- Real Estate
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LAW OFFICE ADDRESS
Twin City Attorneys, P.A.
Minneapolis Bankruptcy Attorney
2151 N. Hamline Avenue
Roseville, MN 55113
Phone: (651) 639-0313
Fax: (651) 639-0056 |
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Will I Lose Any Property If I File Bankruptcy?
In most Chapter 7 cases, the debtor does not lose any property. However, it is not unusual for a debtor to lose some property which has become part of the bankruptcy estate. Most of your property will become part of the bankruptcy estate. The bankruptcy estate does not include certain property, such as ERISA qualified pensions, spendthrift trusts or certain education related accounts or interests. A discussion of what property may be part of the estate would be too lengthy for this format. You will have to rely on your lawyer to determine if you have any property which may not be part of the bankruptcy estate.
However, in most cases debtors keep most or all of the property in their bankruptcy estate because the property is “exempt” under §522 of the Bankruptcy Code. Generally, if the total value of your property is less than $11,975 you will lose no property. Further, it may be possible for you to keep property worth a great deal more.
In Minnesota a debtor is permitted to select one of two sets of exemptions, called “federal” or “state” exemptions. The property you get to keep depends on the classification and value of property. For instance, the law generally affords greater protection to homes or cars than to cash in the bank. A debtor can only use one slate of exemptions (state or federal) and married joint debtors must both use the same slate. For discussion of how exemptions are used in joint bankruptcies [SEE JOINT BKY]
These are the federal exemptions from §522(d) of the Bankruptcy Code:
1) interest in homestead (principal residence of debtor or debtor dependent) |
$21,625 |
2) one motor vehicle |
$3,450 |
3) household furnishings and goods, wearing apparel, appliances, books, animals, crops, musical instruments, primarily for household, personal or family use |
Up to $550 for any one item, $11,525 in aggregate |
4) jewelry for personal, family or household use |
$1,450 |
5) property of any kind or description |
$1,150 plus up to $10,825 from any unused (d)(1) |
6) implements, professional books, tools of the trade of debtor |
$2,175 |
7) unmatured life insurance contract owned (not credit life ins) |
100% |
8) certain interests in accrued dividend or interest or loan value in unmatured life insurance when the insured is debtor or dependent |
Up to $11,525 less certain payments from life ins. co. |
9) professionally prescribed health aids for debtor or dependent |
100% |
10 A, B, C) Social security benefit, unemployment comp, local public assistance, veterans’ benefit, disability, illness or unemployment benefit, alimony, support, maintenance, |
100% |
10 D) alimony, support or maintenance |
Amount reasonably neces-sary to support Debtor & dependents |
10 E) payment under stock bonus, pension, profitsharing, annuity, or similar plan on account of illness, disability, age, death or length of service except under certain circumstances [ask your lawyer] |
100%, but certain payments not covered - ask lawyer |
11 A) crime victim’s reparations awards |
100% |
11 B, C) wrongful death claims for person of whom debtor was dependent, payments under life insurance on life of one who debtor was dependent of on date of death |
Amount reasonably necessary to support Debtor & dependents |
11 D) payments for bodily injury (not pain & suffering or money for actual monetary loss) of debtor or dependent |
$21,625 |
12) retirement funds if exempt from taxation under IRS Code §§ 401, 403, 408, 408A, 414, 457 or 501(a) |
To extent exempt under tax law |
These are the basic Minnesota exemptions: (There are other exemptions, ask your lawyer about specific property) Some of the exemptions for all (100%) of a type of property may be subject to constitutional objection if they are based on a Minnesota Statute. This list contains basic exemptions, NOT ALL exemptions which may be available. Amounts apply after 7/1/2010
Homestead occupied as debtor’s dwelling place up to 160 acres |
$360,000; $900,000 if used for agriculture |
Bible, library & musical instruments |
100% |
Pew & burial lot |
100% |
Personal goods: all wearing apparel,1 watch, utensils of debtor & family |
100% |
Household furniture, household appliances, phonographs, radio, radio & tv receivers of debtor & family |
$9,900 |
Wedding rings or other symbols of marriage exchanged at time of marriage & in debtor’s possession |
$2,695 |
Farm machines used in farming by debtor principally engaged in farming & livestock, farm produce, standing crops |
$13,000* |
Tools of trade; tools, implements, machines instruments, office furniture, stock in trade & library reasonably necessary in debtor’s trade, business or profession |
$11,000* |
University apparatus, library, philosophical & chemical or other apparatus belonging to or used in instruction of youth, in any university, college, seminary or school indiscriminately open to the public |
100% |
Exempt property claims. Money from claim on account of destruction or damage to exempt property |
100% |
Insurance proceeds. money received or payable to surviving spouse or child from insurance payable at death of spouse or parent |
$44,000 + $11,000 for each dependent of surviving spouse or child |
Beneficiary associations relief or other benefits payable or to be rendered to police dept. association, fire dept. association, beneficiary association or fraternal benefit association to any person entitled to assistance or certificate holder of beneficiary of cert. holder |
100% |
Manufactured home inhabited as home by debtor (requirements for size, etc.) |
100% |
Motor vehicle (one vehicle only) |
$4,400; $44,000 if modified at cost of at least $3,300 to accommodate physical disability of authorized person |
Earnings (exempt if not subject to garnishment under §571.911) - earnings lose character as earnings 20 days after deposit |
Greater of 75% of disposable wages or 40 times minimum wage |
Public assistance money received from various public assistance programs |
100% |
Salary or earnings of past recipient of public assistance for six months after returning to private employment or farming |
100% |
Minor child’s earnings (§550.37, s. 15) |
100% |
Claims for damages recoverable by person by reason of levy upon or sale after execution of person’s exempt property or by wrongful taking or detention of such property and any judgment |
100% |
Rights of action for injuries to person of debtor or of relative |
100% |
Life insurance aggregate interest in accrued dividend or interest under or loan value of unmatured life insurance contract owned by debtor under which insured is debtor or person of whom debtor is dependent |
$8,800 |
Employee benefits - right to present or future payments or payments received by debtor under stock bonus, pension, profit sharing, annuity, IRA, Roth IRA, individual retirement annuity, simplified employee pension, or similar plan or contract on account of illness, death, age, or lenght of service to extent of debtor’s aggregate interest |
$66,000 plus additional amounts reasonably necessary for support of debtor or debtor’s dependent(s) |
Proceeds for improvements to property; proceeds received for labor, skill or machinery contributing to improvement of real estate under Minn. Stat. §514.01 |
100% |
Certain public benefits: worker’s compensation (§176.175); unemployment comp (§268.192); veteran’s benefits (§550.38); crime victim’s comp (§611A.60) |
100% |
Certain accident or disability proceeds (§550.39) |
100% |
Pensions (if part of bankruptcy estate) public employees (§353.15); state employees (§352.96); state troopers (§352B.071) |
100% |
Certain federally controlled retirement benefits – civil service (5 usc §8346); foreign service (22 usc §4060); military service (10 usc §1440); railroad workers (45 usc §241m); social security (42 usc §407); veteran’s benefits (38 usc §3101) |
100% |
Rights under federal statutes for survivor’s benefits – military service (10 usc §1450); judges & certain court personel (28 usc §376); lighthouse workers (33 usc §775) |
100% |
Death and disability benefits under federal statutes – US government employees (5 usc §8130); longshoremen, harbor workers (33 usc §916); military service (42 usc §1717) |
100% |
miscellaneous federal non bankruptcy– military deposits to savings account while on permanent duty (10 usc §1035); indian lands, homestead sales or lease proceeds (25 usc §410); Klamath indian tribe benefits (25 usc §§543, 545); military group life insurance (38 usc §1970(g)); railroad workers’ unemployment (45 usc 352(e)); seaman’s clothing (46 USC. §11110); seaman’s wages on voyage pursuant to written contract (46 USC. §11109) |
100% |
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