Most Property Is Protected Under the Bankruptcy Exemptions
One of the first concerns about filing bankruptcy is what assets must be surrendered. The short answer: most people lose no assets. When the bankruptcy exemptions are properly applied, you should be able to keep your home, vehicle, retirement savings and everything or nearly everything you own.
If you file bankruptcy in Minnesota, you must choose between the state exemptions or the federal exemptions. This is a decision that must be made before you file, and it is one more reason to discuss your case with the experienced bankruptcy lawyers of Hoglund, Chwialkowski & Mrozik, PLLC. We carefully prepare your petition to maximize your debt relief and protect as much as possible of your hard-earned wealth.
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Exempting Property in a Chapter 7 Bankruptcy
In a Chapter 13 bankruptcy, you agree to repay a portion of your debts over several years. In exchange, you are allowed to keep all property, including your house and car if you can keep up with the payments.
In a Chapter 7 bankruptcy, the assets of your estate are theoretically sold to reimburse unsecured creditors for discharging your debts. In reality, nearly all property that the average individual or married couple owns is exempt from liquidation. As a result, most clients are able to keep their residence, vehicle and retirement, as well as their furnishings, jewelry and even their “toys” such as boats, guns and flat-screen TVs.
However, every case is unique. You cannot afford to assume anything. If you have substantial equity in your home or non-exempt assets, you may have to forfeit that asset, buy it back from the trustee or opt for Chapter 13 reorganization.
Federal Versus Minnesota Bankruptcy Exemptions
There are significant differences between the state and federal exemptions. For example, the Minnesota homestead exemption protects nearly unlimited equity in a primary residence or farmstead, while the federal exemption is capped at $21,625 for an individual or a $43,250 for a married couple who are joint on the title of the homestead. On the other hand, there are certain federal exemptions which exceed or are not mirrored in the state exemptions. Our experienced attorneys are familiar with the nuances of each and will choose the exemption scheme that is most beneficial to your circumstances.
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Our bankruptcy asset protection attorneys have more than 40 years of combined experience in bankruptcy law, and we take the time to address your concerns and prepare your bankruptcy petition the right way. Contact us today for a free consultation.