In bankruptcy, a homestead exemption protects equity in your home. Here you’ll find specific information about the homestead exemption in Minnesota.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
Under the Minnesota exemption system, homeowners may exempt up to $390,000 of equity in their home or other property covered by the homestead exemption, or up to $975,000 if the property is used primarily for agricultural purposes.
The property may not exceed 160 acres. Previously, Minnesota law only protected up to one-half acre of land within city limits, but the law has been amended and the one-half acre restriction has been removed.
Some states allow married couples filing a joint bankruptcy to double the homestead exemption, but in Minnesota you cannot double.
(There may be other advantages to filing a joint bankruptcy with your spouse. To learn more, see Bankruptcy Considerations for Married Couples.)
In Minnesota, the homestead exemption applies to real property, such as your home or condominium. You can also fully protect the value of your manufactured home. Whether you live in a traditional house or manufactured home, you must occupy the property in order to protect it with the Minnesota exemptions.
Minnesota law also allows you to protect insurance proceeds received from the loss or damage of your exempt homestead (up to the amount protected by the homestead exemption).
In Minnesota, you can use either the state exemption system or the federal bankruptcy exemption system (but you can’t pick and choose different exemptions from each system – you have to use all state exemptions or all federal exemptions.)
The federal bankruptcy homestead exemption amount is $22,975. The exemption may be used for homes, condos, co-ops, mobile homes, and burial plots. Married couples may double this exemption. You can find the federal bankruptcy homestead exemption at 11 U.S.C. §522(d)(1) and (5).
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Minnesota, the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy.
The Minnesota homestead exemption will not protect your home from debt incurred in the improvement of the homestead or by the services of laborers.
Minnesota’s homestead exemption is found in the Minnesota Statutes at Minn. Stat. Ann. Sections 510.01 and 02. The section protecting manufactured homes is found at Minn. Stat. Ann. Section 550.37. To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.
You can find the Minnesota Statutes on the Minnesota Office of the Revisor of Statutes website at www.revisor.mn.gov.
The Minnesota exemption amounts are adjusted on July 1 of even-numbered years, in accordance with the implicit price deflator for the gross national product, compiled by the Department of Commerce. Current exemption amounts can be found on the Minnesota Department of Commerce website at www.mn.gov/commerce/.