Bankruptcy Exemptions

Exemptions in a bankruptcy refer to assets that will not be liquidated during the bankruptcy process. In other words, exemptions are those things that you can keep. The bankruptcy exemption laws focus on the fair market value of the things you own, not purchase price or replacement cost. There are different Federal and State exemptions that all people should be aware of when deciding whether bankruptcy is a viable option for them. Below is a list of Federal and State exemptions:

Federal Bankruptcy Exemptions

(The amounts shown are indexed to inflation and increased automatically on August 1, 2013.)

  • Real estate (homestead) up to $22,975 for single filing or $45,950 for joint filing
  • Life insurance cash value up to $12,250
  • Child support
  • Alimony
  • Pensions
  • 401 (k) savings plans and other retirement fund accounts
  • A motor vehicle up to $3,675 per person filing
  • Jewelry up to $1,550 in value
  • Household items up to $12,725
  • Public benefits and social security or welfare payments
  • Tools or items used for your trade up to $2,300 in value
  • Personal Injury Case up to $22,975
  • “Wild Card” exemption consisting of unused home exemption up to $12,725.

State Bankruptcy Exemptions

  • Real estate (your home) up to $360,000  and up to 160 acres
  • Personal property up to $9,900
  • Life insurance cash value up to $8,000 and $44,000 life insurance proceeds paid to a surviving spouse
  • Child support
  • Alimony
  • Pensions
  • 401 (k) savings plans and other retirement fund accounts
  • A motor vehicle up to $4,400
  • Personal injury lawsuit proceeds
  • Public benefits and social security or welfare payments
  • Tools or items used for your trade up to $11,000 in value

What this means is that assets that are not considered exempt will be liquidated under a Chapter 7 bankruptcy.  While every case is different, in most instances you will be able to keep your items due to these exemptions listed above.

Dischargeable Debt Exemptions

Exemptions can also refer to the debts that will not be discharged during the process. When you file for bankruptcy there are some debts that you will still need to continue to pay for. This can include:

  • Student loans
  • Tax fraud payments
  • Child support

What this means is that, even if you do file for bankruptcy, you will still be responsible for certain payments. To learn more about bankruptcy exemptions and for a free initial consultation with an experienced Minnesota bankruptcy lawyer, contact the team at Buettner Law Group, LLC. We have been providing financial assistance to people across Minnesota for several years and offer compassion, support and affordable legal service during this difficult time in your life. Contact us today at 612-377-5311 for a free initial consultation.