Minnesota Bankruptcy Exemptions — What You Keep
What property you can protect when filing for bankruptcy in Minnesota — homestead, personal property, vehicle, wage, and retirement exemptions.
Minnesota's exemption system
Minnesota allows debtors to choose between state exemptions and the federal bankruptcy exemptions under §11 U.S.C. § 522(d). An attorney can help determine which set protects more of your property.
Key Minnesota exemptions
Homestead
$450,000 ($1,125,000 if property is used for agricultural purposes). Minnesota allows debtors to choose between state and federal exemptions. The homestead exemption applies to real property occupied as the debtor's principal place of residence. This protects equity in your primary residence — if your home equity is within this limit, you keep the house in bankruptcy.
Personal property §550.37(4)
$12,150 in household furniture, appliances, and consumer electronics, plus a separate $3,308 in jewelry (wearing apparel, one watch, utensils, and foodstuffs are exempt without a dollar limit). This covers household goods, furnishings, clothing, and everyday personal items.
Vehicle §550.37(12)
$5,000 in equity ($50,000 if modified for disability). This protects equity in your car — meaning the value of the vehicle minus what you owe on it.
Wages §571.922
Garnishment capped at 25% of disposable earnings if weekly income exceeds 80× the hourly wage, 15% if income is 60×–80×, or 10% if income is 40×–60× (or amount exceeding 40× minimum wage, whichever protects more). This applies to wages already earned but not yet paid at the time of filing.
Wildcard §550.37(28)
$1,500 in any property, including funds in a bank account (available in bankruptcy). A wildcard exemption can be applied to any property not fully covered by other exemptions.
Retirement accounts §550.37(24)
ERISA-qualified plans, IRAs, Roth IRAs, Minnesota State Retirement System (MSRS), PERA, TRA, and deferred compensation are exempt. Retirement accounts receive strong protection in bankruptcy — both under state law and federal law §29 U.S.C. § 1056 (ERISA).
Tools of trade §550.37(6)
$11,250 in tools, implements, machines, furniture, and library used in trade or profession. This protects the equipment you need to earn a living.
Minnesota exemption comparison
| Homestead | Personal property | Wildcard | |
|---|---|---|---|
| What it protects | Equity in your primary residence §11 U.S.C. § 522 | Household goods, furnishings, clothing §11 U.S.C. § 522 | Any property not covered by other exemptions §11 U.S.C. § 522 |
| Minnesota limit | $450,000 ($1,125,000 if property is used for agricultural purposes) | $12,150 in household furniture, appliances, and consumer electronics, plus a separate $3,308 in jewelry (wearing apparel, one watch, utensils, and foodstuffs are exempt without a dollar limit) §550.37(4) | $1,500 in any property, including funds in a bank account (available in bankruptcy) §550.37(28) |
| Key limitation | Primary residence only — not investment property §11 U.S.C. § 522 | Individual item and aggregate caps may apply §11 U.S.C. § 522 | Total cap across all wildcard-claimed property §11 U.S.C. § 522 |
| Strategic value | Can be the largest exemption | Protects everyday necessities | Fills gaps left by specific exemptions |
How exemptions affect chapter choice
- In Chapter 7, non-exempt property can be liquidated by the trustee. High exemptions mean you keep more.
- In Chapter 13, the "best interests of creditors" test means your plan must pay unsecured creditors at least what they would have received if non-exempt assets were liquidated in Chapter 7. Higher exemptions can reduce your required plan payment.
Common exemption planning considerations
- Is your home equity within the homestead limit, or does it exceed the cap?
- Do you have a vehicle loan that reduces your equity below the exemption?
- Are there assets that could be reclassified or converted to exempt form before filing?
- Would waiting to file change the exemption calculation (e.g., recent large deposit, bonus, tax refund)?
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Frequently Asked Questions
General answers to common questions. Specific outcomes depend on your facts and timing.
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Related guides
- $12,150 in household furniture, appliances, and consumer electronics, plus a separate $3,308 in jewelry (wearing apparel, one watch, utensils, and foodstuffs are exempt without a dollar limit)
- Garnishment capped at 25% of disposable earnings if weekly income exceeds 80× the hourly wage, 15% if income is 60×–80×, or 10% if income is 40×–60× (or amount exceeding 40× minimum wage, whichever protects more)