Bankruptcy Exemptions: What You Can Keep

Bankruptcy is a stressful process. One of the biggest questions people ask when contemplating filing is, “What do I get to keep if I file bankruptcy?” Many items and financial sources are exempt from bankruptcy which gives potential filers some peace of mind during a difficult time.


Minnesota’s homestead exemption protects home and land equity as the home is the filer’s primary residence. This exemption also protects any sales proceeds and insurance payouts from structural damage. The Minnesota homestead exemption protects up to $390,000 of home equity, the full value of a manufactured home, up to 160 acres of land, and up to $975,000 of agricultural land equity.


Bankruptcy law protects workers’ wages up to 75 percent of one’s gross earnings or forty (40) times the federal minimum hourly wage, whichever is greater.


In Minnesota, the motor vehicle exemption allows Chapter 7 filers to keep their vehicles in certain circumstances. Generally, equity that falls below the state’s vehicle exemption is safe while significantly more equity may subject the vehicle to sale by the trustee to repay some of the filer’s unsecured creditors. The Minnesota vehicle exemption is $4,600; however, for vehicles modified for disability, this exemption increases to $46,000 as long a the modifications cost at least $3,450. For married couples who are filing a joint bankruptcy, this exemption doubles.

Personal Property

Bankruptcy-exempt personal property includes:

  • Clothing
  • One watch
  • Electronics up to $10,350
  • Wedding rings up to $2,817.50
  • Food
  • Appliances and utensils
  • Furniture
  • Business tools, farm implements, produce, livestock, and crops up to $11,500
  • Burial plots or church pews

Pension and Retirement Funds

Pensions, annuities, IRAs, profit-sharing, and similar plans valued up to $30,000 are exempt from bankruptcy.

Insurance Benefits

Insurance death proceeds of a spouse or parent up to $46,000 are protected, as well as an additional $11,500 for each surviving dependent. Additionally, as mentioned, insurance proceeds arising from loss or damage to exempt property are exempt, as well as any insurance proceeds stemming from personal injury or wrongful death.

Additional Assistance/Benefits

The following assistance and benefits are exempt from bankruptcy:

  • Public assistance such as earned income, child, and education tax credits
  • Unemployment
  • Worker’s compensation
  • Veteran’s benefits

For more information, or to schedule a consultation to explore your bankruptcy needs, please contact us.

Please contact our law office concerning your case. The content of this article does not constitute an attorney-client relationship.