Home and land on which it is situated to $420,000; if homestead is used for agricultural purposes, $1,050,000; cannot exceed 1/2 acre in city, 160 acres elsewhere (husband & wife may not double) (more...)
Appliances, furniture, jewelry, radio, phonographs, & TV to $1@,000 total
Bible and books
Clothing, one watch, food, & utensils for family
Farm machines, implements, livestock, produce, & crops to $13,000 total
Tools, machines, instruments, stock in trade, furniture, & library to $12,000 total
Total value of Tools of Trade and Farm Machines combined cannot exceed $13,000 (more...)
Wages, paid within 6 mos. of returning to work, after receiving welfare or after incarceration; includes earnings deposited in a financial institution in the last 60 days
Minimum 75% of weekly disposable earnings or 40 times federal minimum hourly wage, whichever is greater (more...)
Citations and links to primary law and secondary sources are provided for those who wish to do further research. Every effort has been made to make this information up to date and accurate, but laws can and do change without notice. Persons relying on this information are responsible for confirming its timeliness and accuracy before relying on it. (This information was updated for April 2019.)
Also bear in mind that these brief summaries do not list every detail or exception to these exemptions. For example, there are often exceptions for collection of child support debt and/or taxes. These listings are designed to inform you of laws that exist for your benefit, so that you may exercise what rights you may have.
Finally, this website is intended to provide information only. It cannot answer whether your property does or does not qualify for a specific exemption.
Minnesota Offers a Choice of Federal or State Exemptions
Minnesota law allows you
to use the exemptions found in the U.S. bankruptcy code (11
U.S.C. § 522(d)) or the exemptions provided under Minnesota law. However, you cannot mix and match exemptions from the
federal bankruptcy code and state law. You must choose one system or
However, if you use the state law exemptions, there are a few U.S. 'non-bankruptcy'
exemptions (that is, exemptions that exist outside of federal bankruptcy
code) that you can use in addition to your state law exemptions. The
four most significant non-bankruptcy exemptions are for:
Wages (a general cap on what percentage of your wages can be garnished)
Social Security benefits
Civil Service benefits, and
Other non-bankruptcy exemptions mostly deal with
various benefits to government and military personnel, with a few odd
laws regarding specially regulated labor markets such as railroad workers,
merchant sailors, and longshoremen.
tool that shows home values in your neighborhood.
This link will take you to a listing of the average home value in your
zip code. Just
add your street address to get an estimate of the value of your house, and
all others in your neighborhood. (Note: Does not serve all areas,
and valuations are imperfect estimates only.)
Almost every state provides protection for equity in the family
home, and many states have increased the amount of protection in recent
years. Seven states offer unlimited protection. Most states are not as generous.
New Federal Residency Requirement
Under the new bankruptcy law, you must be have lived in the state for
at least 40 months (three years and four months) before you can claim
any homestead protection greater than $160,375. (If your state's exemption offers
less than this amount, the law is irrelevant to you.) The law is poorly
worded but seems to say that if you move from one home to another in
the same state, you can claim that state's homestead protection.
Real property, including co-op or mobile home, or burial plot to $25,150; unused portion of homestead to $12,575 may be applied to any property
11 U.S.C. § 522 (d)(1), (d)(5)
(retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986) (For assets in individual retirement accounts described in section 408 or 408A of the Internal Revenue Code of 1986, other than a simplified employee pension under section 408(k) of such Code or a simple retirement account under section 408(p) of such Code)
(Earned Income Tax Credit is federal no local, so not exempt)
Virtually all states protect life insurance proceeds in some manner
or another. Some restrict it to proceeds paid to a dependent. Many
states also protect the cash-value or loan-value of insurance policies.
If a substantial amount of your assets are in life insurance, you
may want to consult a professional to determine the extent to which
those policies are exempt. The website AssetProtectionBook.com does
particularly thorough job of covering Minnesota insurance
Under a new provision of the bankruptcy law, enacted in October 2005,
virtually all types of pension and retirement accounts recognized by
the IRS are completely exempt regardless of what state you live in.
This provision exempts"retirement funds to the
extent that those funds are in a fund or account that is exempt from
taxation under Sections 401, 403, 408, 408A, 414, 457, or 501(a) of
the Internal Revenue Code."
This list covers 401(k)s, 403(b)s, profit-sharing and money purchase
plans, IRAs (including SEP and SIMPLE plans), as well as defined-benefit
The exemption applies whether you rely on the list of federal bankruptcy
exemptions (11 U.S.C. 522(d)(12)) or the exemption laws of your own
state (See 11 U.S.C. 522(b)(3)(C)). Section 522(b)(4) spells out the
specific requirements for qualifying under these provisions.
These exemptions are unlimited, except for Roth and traditional IRAs,
which are capped at an aggregate IRA account value of $1 million
per individual (adjusted every three years for inflation). (See 11
SEP and SIMPLE IRAs, along with all other types of non-IRA retirement
accounts such as 401(k)s and 403(b)s, are completely exempt.
plans established and maintained by tax-exempt organizations, e.g.
churches, nonprofit organizations)
Special 'exclusion' of education accounts
Under the new bankruptcy law, education savings accounts or education
IRAs created under sections 529 or 530 of the Internal Revenue Code
are 'excluded' from the bankruptcy estate (not quite the same as 'exempt'
but with the same result).
See, 11 U.S.C. 541(b)(6), (529 Education Tuition Plans) and 11 U.S.C.
541(b)(5) (530 Coverdell IRAS)
NOTE: Even though these education accounts are excluded from the bankruptcy
estate, you still must list them on your forms (See section (11 U.S.C.
403(b)( tax deferred annuity plan including church plans, etc)
See 11 U.S.C. 541(b)(7)
The law protects up to $1,283,025 of any pension or retirement fund that qualifies for
special tax treatment under Internal Revenue Code sections 401,
402, 403, 408, 408A, 414, 457, or 501(a).
All types of retirement funds and accounts that tax-exempt under IRC section 401, 403, 408, 408A, 414, 457, or 501(a) ; IRAs & Roth IRAs limited to $1,362,800 (excluding rollover contributions); limitation can be overidden by judge.
11 U.S.C. § 522 (d)(12)
11 U.S.C. § 522 (n)
Both of these websites offer interactive tools to determine the
current value of your used car.
This category covers your car, your non-retirement bank accounts,
and most of your other personal possessions, other than your house.
States vary widely on how generous they are in this area. Some exemptions
may be for any combination of property up to an aggregate amount. Other
exemptions apply only to specific items, such as jewelry.
Remember that an exemption will not protect your car from being repossessed
by the holder of the car loan you used to purchase the vehicle
if you pledged the vehicle as security for the loan. To keep the car,
you will have to pursue other options such as 'redemption' or 'reaffirmation.'
See the help topics and How
to File for Chapter 7 Bankruptcy for more
Animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments to $625 per item, $13,400 total
11 U.S.C. § 522 (d)(3)
These are the things you use to make a living. An automobile or truck
can be a tool of trade if you use it as such. Commuting to work doesn't
count, but if driving is a necessary component of transacting your
business, you can claim your vehicle is a tool of trade.
Most states have a wage garnishment law. In some states, wage garnishment laws can be used in bankruptcy as an exemption to protect income that you had coming due, but not yet received, as of the day you filed, for work you had already done -- so called "earned but unpaid wages".
In some states, the wage garnishment law protects not only wages owed to you, but also wages already in your possession and saved over time preferably holding it in a separate bank account. In other states wage garnishment laws do not protect wages once they are they are in your possession.
Finally, if you live in a state that lets you use the Federal bankruptcy exemptions in 522(d), and you choose to use them, then you get no exemption for earned but unpaid wages; the wildcard exemption is your only option. See, e.g. U.S. v. Christensen, 200 B.R. 869 (D.S.D. 1996) (applying FDCPA law, based on similar statutory structure to bankruptcy's opt-out law)
Wages, paid within 6 mos. of returning to work, after receiving welfare or after incarceration; includes earnings deposited in a financial institution in the last 60 days 550.37 subd. 14
Minn. Stat. Ann. § 550.37 subd. 14
Most, but not all, states allow a so-called "wild-card" exemption that can apply to any property. The wild card exemption can be of particular help if one or more of
your other exemptions falls short of protecting your equity. You may
split your wild card exemption amount over multiple items and stack
it atop other exemptions as needed to protect exposed equity.
Protecting Your Assets in Bankruptcy:Property Exemption Laws
Property you get to keep*
The law of what has come to be called "Asset Protection" is actually a mixture of laws that allow you to keep certain property no matter what, even if you owe money to others. Every state has laws that designate specific property you get to keep so that you can continue living a productive life. That is, even if you owe a trillion dollars to someone, the law won't make you sell the shirt off your back to pay it. And in Texas and Florida, they won't even make you sell your million dollar mansion, or in Nevada, your gun.
These rules are called "property exemptions." They vary from state to state. They designate what property is off limits to your 'creditors '-- the legal name for those who claim you owe them money.
What are Bankruptcy Exemptions?
Every state has laws that designate certain types of property (your home, some personal possessions, tools of your trade) that are off-limits to "unsecured" creditors -- that is, creditors who do not have a lien on your property. Credit card debt and medical bills are the two the most common types of unsecured debt (unless you have a special 'secured' credit card).
Unsecured creditors cannot force you to sell your exempt property to pay off the debt. Even if the creditor goes to court wins a court judgment against you, and takes steps to attach a 'judgment lien' to your property, you are still entitled to your exemption amount before any sale proceeds are distributed to the unsecured creditor. (However, some debts, like child support, may be an exception.)
If you eventually do sell your property voluntarily, the creditor has a right to have its lien paid from the sale proceeds before you receive anything. As a practical matter, most people facing bankruptcy only own property that is exempt, and have no interest in selling what they have. If all of your property is protected by exemption laws, you are said to be "judgment proof" -- whether or not you file for bankruptcy.
If you do file for bankruptcy and all your property is exempt, your case is known as a "no asset" bankruptcy--which really means you have no non-exempt assets.
In bankruptcy, a court official called the "bankruptcy trustee" represents the rights of all unsecured creditors. The trustee can assert whatever rights the creditors would have if they had a court judgment against you.
Another important thing to remember about exemptions is that it only protects the "equity" in your property. That is the difference between the value of the property, and what you owe to secured creditors.
If you contractually agreed to pledge your property as collateral for a debt, this property is known as "secured property," and the debt is called a "secured" debt, and the person you owe is a "secured creditor" and they have a "security interest" in the property. If the debt was incurred to purchase the property itself (e.g. a car loan or first mortgage), the creditor is said to have a "purchase money security interest" (PMSI). Exemption laws offer no protection against such contractual agreements that give the creditor a PMSI.
If you owe $10,000 on a $12,000 car, you have only $2,000 in equity. If your state has at least a $2,000 exemption for motor vehicles, that will be enough to protect the car in bankruptcy --(but you'll still need to make the car payments to the secured creditor.
On the other hand, if you own the vehicle free and clear, then your equity is the full value of the vehicle, and a $2,000 exemption would not enough to protect it. The trustee would force the sale of the car, you would get your exemption amount, and the trustee would get the rest of the proceeds to distribute to the unsecured creditors.
Which State's Exemptions Must You Use?
Which State's Exemptions Must You Use?
Legal test under the new bankruptcy law:
IF you have not lived in for at least two years...
Then, which state did you consider to be your domicile two years ago?
(If more than one state, choose the state in which you lived most for the six months ending two years ago from this date.)
New Residency Requirements for Using State Exemptions
Prior to the new bankruptcy law, filers used the exemptions of the state where they lived when they filed for bankruptcy. Under the new rules, however, some filers will have to use the exemptions of the state where they used to live. Congress was concerned about people gaming the system by moving to states with liberal exemptions just to file for bankruptcy. As a result, it passed residency requirements filers have to meet before they can use a state’s exemption system. Here are the new rules that apply to exemptions for everything but a home:
If you have lived or made your residence in your current state for at least two years, you can use that state’s exemptions.
If you have lived or made your residence in your current state for more than 91 days but less than two years, you must use the exemptions of the state where you lived for the better part of the 180-day period immediately prior to the two-year period preceding your filing.
If you have lived or made your residence in your current state for fewer than 91 days, you’ll need to wait until you have lived there for at least 91 days before you can file (and then use whatever exemptions are available to you according to the rules set out above).
If the state you are filing in offers a choice between the state and federal bankruptcy exemptions, you can use the federal exemption list regardless of how long you’ve been living in the state.
If these rules deprive you of the right to use any state’s exemptions, you can use the federal exemption list. For example, some states allow their exemptions to be used only by current state residents, which might leave former residents who haven’t lived in their new home state for at least two years without any available state exemptions.
A longer residency requirement applies to homestead exemptions: If you acquired a home in your current state within the 40 months before you file for bankruptcy (and you didn’t purchase it with the proceeds from selling another home in that state), your homestead exemption will be subject to a cap of $125,000, even if the state homestead exemption available to you is larger. For detailed information on homestead exemptions, see Ch. 4.
Under a new provision of the bankruptcy law, enacted in October 2005, virtually all types of pension and retirement accounts recognized by the IRS are completely exempt regardless of what state you live in.
This provision exempts "retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under Sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code."
This list covers 401(k)s, 403(b)s, profit-sharing and money purchase plans, IRAs (including SEP and SIMPLE plans), as well as defined-benefit plans.
The exemption applies whether you rely on the list of federal bankruptcy exemptions (11 U.S.C. 522(d)(12)) or the exemption laws of your own state (See 11 U.S.C. 522(b)(3)(C)). Section 522(b)(4) spells out the specific requirements for qualifying under these provisions.
These exemptions are unlimited, except for Roth and traditional IRAs, which are capped at an aggregate IRA account value of $1,283,025 per individual (adjusted every three years for inflation). (See 11 U.S.C. 522(n))
SEP and SIMPLE IRAs, along with all other types of non-IRA retirement accounts such as 401(k)s and 403(b)s, are completely exempt.
The new bankruptcy law exemption for retirement accounts includes all funds "exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986." Those sections cover:
401 (a qualified pension, profit-sharing and stock bonus plan created under a trust established by an employer for the exclusive benefit of employees or beneficiaries)
403 (qualified annuity plans that are established by an employer for an employee under IRC 404(a)(2) or 501(c)(3))
501(a) (retirement plans established and maintained by tax-exempt organizations, e.g. churches, nonprofit organizations)
Special 'exclusion' of education accounts
Under the new bankruptcy law, education savings accounts or education IRAs created under sections 529 or 530 of the Internal Revenue Code are 'excluded' from the bankruptcy estate (not quite the same as 'exempt' but with the same result).
See, 11 U.S.C. 541(b)(6), (529 Education Tuition Plans) and 11 U.S.C. 541(b)(5) (530 Coverdell IRAS)
NOTE: Even though these education accounts are excluded from the bankruptcy estate, you still must list them on your forms (See section (11 U.S.C. 521(c).)
403(b)( tax deferred annuity plan including church plans, etc)
See 11 U.S.C. 541(b)(7)
Insurance Exemption Glossary
Insurance Exemption Glossary:
Insurance exemptions use a lingo all their own and some familiarity with the jargon is essential to understanding what is exempt.
Three kinds of insurance assets
You may own a property interest in life insurance in three different ways: you may own an unmatured life insurance contract (with no cash value - e.g. a term life insurance policy), you may own cash value in an unmatured life insurance policy (e.g. a whole life policy), and you may, as a beneficiary, be entitled to proceeds from a matured life insurance policy.
"Matured" simply means that the conditions of the policy have have been met. A matured policy is paying proceeds to the beneficiary of the insured.
An unmatured policy is not paying proceeds, but, can still have a current value in two ways:
1. In the case of a "term life" policy, the continued existence of the contract itself can be said to have value, even if it cannot be converted to cash.
2. Other kinds of of policies can have accumulate value over time, and that value that can be borrowed against, or turned into cash if the policy is 'surrendered' (see "avails" below).
Reading insurance exemptions
Many states have unlimited exemptions for insurance proceeds. However, most states offer only limited exemptions for the cash or loan value of an unmatured policy.
A few states, however, offer unlimited exemptions for the cash value of such policies, or policies offered by 'fraternal benefit societies.' In such states, life insurance is often an important component of an overall asset protection strategy.
Avails: Any amount available to the owner of an insurance policy other than the actual proceeds of the policy. Avails include dividend payments, interest, cash or surrender value (the money you'd get if you sold your policy back to the insurance company) and loan value (the amount of cash you can borrow against the policy).
How do I eliminate judicial liens on exempt property?
How do I eliminate judicial liens on exempt property?
If there is a lien on your property as a result of a court judgment against you, you may have the right to remove it if it "impairs" an exemption on the property. That is, if the equity in your property is protected by an exemption, you can get the judicial lien on it removed by the bankruptcy court as another element of the "fresh start" that bankruptcy is designed to provide.
If there are judicial liens on your property, be sure to determine which ones can be eliminated through the "lien avoidance" procedure. Some liens cannot be removed however, including a judicial lien that secures a domestic support obligation. 11 U.S.C.A. § 522(f)(1)(A).
For more information on lien avoidance, when it's available and step by step procedural guidance how to do it, see How to File for Chapter 7 Bankruptcy, 14th Edition, by Elias, Renauer & Leonard. Buy now: Nolo :: Powell's :: Amazon
Note that some judicial district web sites have links for those who provide free legal assistance to debtors who need representation in a lien avoidance proceeding.
Exemptions & "Secured Debts"
*Exemptions & "secured debts"
Note that property that is collateral for a purchase-money loan (such as a car securing a car loan or a home securing a first mortgage) is not protected by exemptions from repossession actions by that lender. Any equity you may own in the property is protected and may give you certain rights against holders of judgment liens and second or third lien holders.
Let's repeat that first point before we go further: Exemption laws do NOT protect you from losing property if you've voluntarily pledged the property as security for a loan and you don't make the payments.
Example: Unsecured vs Secured Debts
So... for example. If you owe $30,000 to credit card companies, that debt is "unsecured". There is no collateral attached to it. No matter what they threaten, the credit card company can't take any of your exempt property. Likewise, most medical bills and lawsuit settlements are "unsecured" debts. If an unsecured creditor bothers to go to court get a judgment against you, they can get the court to attach a "judgment lien" to your property. But if the property is exempt, you typically can (and should) ask the bankruptcy court to remove that lien from your property (but you have to ask -- its not automatic).
Continuing the example ... If you were persuaded to pay off your credit cards and other unsecured debts with a lower interest, "secured" loan, say, from a loan consolidation company, you probably pledged your home equity or other property as collateral.
As a general principle, once you've voluntarily (i.e. through a contract or signing something) pledged your property as security for a loan, the exemption laws no longer protect you. The creditor can repossess the property you pledged regardless of whether it is protected by an exemption.
Note that this is a general principle, among other factors -- more than we can go into here.... That's why we wrote a book... Specific facts might lead the court to apply other principles to, for example, undo a recent transaction if it unfairly benefited a single specific creditor at the expense of many others.
Bankruptcy offers the option of keeping your secured property by immediately paying it's current replacement value of the object rather than the loan amount. This can be an attractive option for those with auto loans where the value of the car has most likely depreciated faster than the loan balance. However, coming up with the full amount in cash can be difficult if not impossible. In the past few years, a few alternatives have arisen.
Vendors of "Redemption Financing"
The companies listed below specializes in making auto loans to bankrupt debtors seeking the bankruptcy option of "redemption" of their vehicle, whereby the debtor keeps the car by immediately paying the vehicle's current market value (replacement value) rather than the full loan amount over time. These companies will finance a new auto loan (generally through a bank) to produce the cash to pay the redemption amount to your original creditor, and then you pay the redemption amount to the new lender over time. Of course, if you miss payments under the new loan, you'll still lose the vehicle, but at least your monthly payments should be smaller. The new lender takes ownership of the lien on your car. Debtors must have an otherwise good credit history to qualify, and the car must be in good enough condition (i.e. worth enough) to protect the bank's loan.
This company specializes in making auto loans (through US Bank) to debtors seeking the option of "redemption" available to those in bankruptcy whereby the debtor can keep a car by paying the current market value (replacement value) of the automobile rather than the loan amount. The company will finance redemption of your existing automobile, or arrange financing for a replacement automobile. Debtors must have an otherwise good credit history to qualify. See the site for more information.
The site has special home pages for debtors, debtors attorneys, creditors, creditors attorneys, bankruptcy trustees, auto dealers.
Of course, if you can't make the payments on this revised amount loan, you'll still lose the car, just to a different lender. So this option is only a solution if you can make the payments on the reduced amount.
Fresh Start Loan Corporation, a Delaware Corporation, dba Redemption Financial Services™ is a duly licensed Consumer Loan Company that began its operations in 1999. The company is now licensed in 12 states*, with licenses pending in 6 states** as of January, 2005.
Paul D. Kirschner, President, General Counsel, Fresh Start Loan Corporation . All employees of Fresh Start Loan Corporation, its loan officers, loan processors, customer service and intake employees are located at our headquarters in Gig Harbor, Washington.
* Licensed in Alaska, Alabama, Arizona, Georgia, Florida, Hawaii, Indiana, Kentucky, Missouri, Oregon, Utah and Washington ** Licenses Pending in California, Illinois, Mississippi, New York, Nevada and Ohio
Citations to Exemptions
Citations to exemptions
When you fill out your bankruptcy forms (Form 6, Schedule C), you will be asked what property you claim as exempt -- and a citation of the law that allows it.
This page gives you those citations and gives a brief summary of the exemption.
The help topics on the right provide additional information.
It is up to you to apply the correct citation to your property. If you have any questions, consult an attorney. If you own real estate, you should consult with an attorney about how the exemptions apply to your property.
Conditions of use & common sense advice before you use this information
Conditions of use & common sense advice before you use this information— Permission to use these materials is given only on the condition that the user will be solely responsible for verifying the accuracy of the information contained here.
This list was last updated, January 2018. Laws can and do change. Before relying on this or ANY information you find on the internet, confirm that it is current. (If you find something incorrect or out of date, please report it here. Thanks. )
Every effort has been made to report these laws accurately. However, there could be errors or omissions which could change the effect of the law in a particular case.
If you see a law listed here and want to know how it applies to you -- that's what lawyers are for. A lawyer can tell you whether and how a law would apply to your specific situation, and give you other ideas of how the laws might work in your favor, in your particular case. There are resources on this website to help you locate a lawyer in your area.
Laws are interpreted and applied by trustees and judges, and often even the judges don't agree on what the law means and when it applies. Over time, and hundreds of cases, there develops a pretty clear picture of what exemptions are allowed or routinely challenged within the local bankruptcy practice. Local customs can vary one district to the next, or even depend on the trustee. An experienced local bankruptcy professional should have a good sense of what flies and what doesn't with your local judge and trustee.
See the disclaimer, for other important limitations regarding this information.
Updates & Errata
Updates & Errata
I've been maintaining these tables since 1997. I try to update them twice a year. Laws change, and, even with a 99.9% accuracy, there are thousands of citations here, so a few might have a glitch or two. If I've missed something important, or something has changed, let us know. I'll fix it. Other users will thank you.