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“The purpose of an exemption is to protect a debtor and his family against absolute want by allowing them, out of his property, some reasonable means of support and education and the maintenance of the decencies and proprieties of life.” Poznanovic v. Maki, 296 N.W. 415, (1941)

Exempt property is not touched by the court in a bankruptcy proceeding. State and federal laws provide a list of all property that can be kept through exemption during your bankruptcy proceeding. In a Chapter 7 bankruptcy, all property that is not exempted will be liquidated in order to pay off creditors, so it is in your best interest to know what can be kept through exemption.

In Minnesota, a person must choose whether to use the Federal or State exemptions. This can be a complicated decision and clients should consult closely with their attorney before filing a bankruptcy petition. The list below includes both Federal (marked with an (f) and State exemptions. Obviously, the choice of whether to use State or Federal exemptions will have a large impact on the property you get to keep.

The following is allowable as a property exemption:

Bible and musical instruments:

- The family Bible, library, and musical instruments

Pew and burial lot:

- A seat or pew in any house or place of public worship

- A lot in any burial ground

Personal goods:

- All clothes (up to a value of $2,400(f)), one watch, utensils, and food

- Household furniture and appliances, a phonograph, a radio, a TV, provided that their total value does not exceed $4,500

- A VCR, linens, china, crockery, educational materials and equipment for children, personal effects, a personal computer and related equipment(f)

- Jewelry up to a value of $1,000(f)

- Wedding rings and other symbols of marriage, up to a value of $1,225

- Professionally prescribed health aids for the debtor or their family(f)

Farm machines:

- Farm machines for a debtor that is primarily a farmer, livestock, farm produce, and standing crops, provided their value does not exceed $13,000

Tools of trade:

- The tools, implements, machines, instruments, office furniture, stock in trade, and library reasonably necessary for the business of the debtor, provided their value does not exceed $5,000($1,500(f))

- If tools of trade and farm equipment are one and the same, then the value cannot exceed $13,000

University apparatus:

- The library and any apparatus owned by a school for the purpose of teaching

Exempt property claims:

- All money received through a court claim on any damaged exempt property

- Any recovery for claims for damages caused by any unlawful taking of exempt property

- Any rights of action for injuries to the debtor or their family

Insurance proceeds and beneficiary associations:

- Life insurance proceeds up to $20,000

- All money, relief, and benefits received from any police department, fire department, beneficiary, or fraternal benefit association

- Interest from any unmatured life insurance contract owned by the debtor, which cannot exceed $4,000

Homestead:

- Real property the debtor is using as a residence provided that it does not exceed $15,000(f) in value

Motor vehicles:

- Mobile home actually in use by the debtor as a dwelling

- One motor vehicle not exceeding $2,400 in value(f), or one motor vehicle not exceeding $20,000 in value that has been modified to accommodate a physical disability

Earnings:

- All earnings not set aside for child support or other garnishments

- Earnings of any minor child - All earnings paid to debtor within 6 months of being released from prison

- All earnings within 20 days of being deposited in a bank

- All earnings paid to debtor within 6 months of returning to work if the debtor has received welfare in the past

Public assistance:

- All relief received based on need

- All earnings of a debtor receiving need-based relief

Employee benefits:

- All employee benefits payable due illness, disability, death, age, or length of service up to a value of $30,000

- Retirement plans with a value of not more than $1,000,000(f) - Veterans’ benefit(f) - Disability, illness, or unemployment benefit(f)

- Support payments from alimony(f)

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