The Minnesota Homestead Exemption

In bankruptcy, a homestead exemption protects equity in your home. Here you'll find specific information about the homestead exemption in Minnesota. For general information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, read The Homestead Exemption in Bankruptcy.

How Much Are the Homestead Exemptions in a Minnesota Bankruptcy?

Minnesota lets filers use either the federal exemption system or Minnesota's state exemption system, so you'll have two homestead amounts to choose between. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.

We've listed both exemption amounts below to help you make an informed choice. We've also included links to a more complete federal exemption list and a site where you can review Minnesota statutes so you'll have an easier time deciding which set will work best for you.

If you're married, remember that spouses can double some exemption amounts, but not all. Find out about other filing considerations for spouses.

What Property Is Protected by the Minnesota Homestead Exemption?

In Minnesota, the homestead exemption applies to the debtor's dwelling and the land on which it is situated. (Minn. Stat. §§ 510.01, 510.02.) You can protect a manufactured home that you inhabit, as well. (Minn. Stat. § 550.37 (12).)

Example 1. If you own a house worth $600,000 and have a mortgage balance of $200,000, you have $400,000 of equity in the property. If you file a Chapter 7 bankruptcy, you can use the homestead exemption to protect all equity.

Example 2. Assume your mortgage is only $100,000 and you can only exempt $450,000 of your $500,000 equity. The Chapter 7 bankruptcy trustee would likely sell your house, give you $450,000 from the proceeds for your exemption, and use any amount remaining after deducting sales costs to pay unsecured creditors. If you wanted to keep the home, you could file for Chapter 13 and pay the $50,000 nonexempt equity portion to unsecured creditors through the Chapter 13 plan.

When Can You Claim the Minnesota Homestead Exemption in Bankruptcy?

You can file for bankruptcy in Minnesota after living there for more than 180 days. However, you must live in Minnesota much longer before using Minnesota exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.

But suppose you lived in multiple states during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.

You'll also need to meet other timing and exemption requirements to prevent losing your home in bankruptcy. Find out more about keeping your home in Chapter 7 or Chapter 13 or consult a bankruptcy lawyer.

Finding the Minnesota Bankruptcy Homestead Exemption Statute

The Minnesota legislature adjusts exemption amounts periodically. To stay up to date, check the website of the Minnesota Legislature, but the best way to protect your assets is by consulting with a local bankruptcy lawyer.

Need More Bankruptcy Help?

Did you know Nolo has made the law easy for over fifty years? It's true, and we want to ensure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

Updated September 21, 2023