One of the biggest concerns people have when it comes to filing for bankruptcy is whether or not they will lose their property. This is an extremely valid concern; after all, our home is more than just a house and our things are more than just material goods. These items come with memories and emotions and it can be devastating having to give up on everything you have worked for.

When you file for bankruptcy, there is a good chance that you will actually not lose your property and possessions, as long as they are exempt under the federal bankruptcy exemption law or Minnesota bankruptcy exemption law. Many people are surprised to learn that, in most bankruptcy cases in Minnesota, you will lose nothing you own.

Minnesota Bankruptcy Property Exemptions

Below are some basic rules regarding the Minnesota bankruptcy property exemptions:

• It is the equity of the item that must be exempted, if you owe money on the item.
• You can choose to either select federal bankruptcy exemptions or Minnesota bankruptcy exemptions. See below to determine which is the right for your situation
• If you are filing for a joint bankruptcy case with you and your spouse, these exemptions are doubled (for each person).
• The exemptions are based on the fair market value of the items that you own, not the purchase or the replacement costs of these items.
• You are only exempt if you list all assets in your bankruptcy. Keeping some of your assets out of the bankruptcy case is not only illegal, but it will also result in you losing it.

Of course, most of us are still confused when it comes to property exemption law in Minnesota which is why it is important to go over your personal situation with a Minnesota bankruptcy attorney. He will be able to explain what you can keep and the reasoning behind this in better detail.

Brief Overview of Bankruptcy Exemptions

• Your Home – $20,200 (federal bankruptcy exemptions)/ $330,000 (Minnesota exemptions)
• Your Vehicle – $3,225 (federal bankruptcy exemptions)/ $4,200 (Minnesota exemptions)
• Household goods including clothing – $10,775 (federal bankruptcy exemptions)/ $9,450 (Minnesota exemptions)
• Jewelry – $1,350 (federal bankruptcy exemptions)/ $2,572.50 (Minnesota exemptions, includes wedding rings and watches only)
• Tools of trade – $2,025 (federal bankruptcy exemptions)/ $10,500 (Minnesota exemptions)
• “Wild Card” exemptions that includes any unused home exemptions – $11,200 (federal bankruptcy exemptions)
• Life Insurance proceeds – exempt if need for your support (federal bankruptcy exemptions)/ $42,000 (Minnesota exemptions)
• Life insurance cash value – $10,775 (federal bankruptcy exemptions)/ $8,400 (Minnesota exemptions)
• IRA’s, ERISA pensions and 401 (k)’s – $1,095,000 (federal bankruptcy and Minnesota exemptions)
• Social security benefits – exempt (federal bankruptcy and Minnesota exemptions)
• Child support – exempt (federal bankruptcy and Minnesota exemptions)
• Spousal maintenance – exempt (federal bankruptcy exemptions)/ exempt as wages, 75% (Minnesota exemptions)

How a MN Bankruptcy Attorney Can Help

Still confused? And so you should be. The above tips can give you a brief understanding of property exemptions but will not be able to tell you exactly what will happen in your case. This is why it’s important to contact a Minneapolis bankruptcy lawyer who can assess your individual case and see what items falls under the exemptions law and what do not.

Filing for bankruptcy is a very big decision that can impact your entire life. Make sure you are going into a bankruptcy case with the right foot forward by avoiding the following six things. Knowing what NOT to do will help you determine the right way to handle your situation.

DO NOT lie about your assets and liabilities. This could lead to bankruptcy fraud. Many people will conveniently forget about a credit card or other debt but this could lead to more trouble than it’s worth. When you file for bankruptcy, you need to include everything and anything.

DO NOT pay back some debt but not others. Many people will want to pay back certain debts, such as those to family and friends, but not to others, such as those to debt collectors. It doesn’t work this way. Unfortunately, you do not get to pick and choose what unsecured debts you pay off, even if family or friends are involved.

DO NOT discuss your bankruptcy with neighbors, colleagues, etc. Although many people are open when it comes to their financial records, it is best to keep the decision to file for bankruptcy as private as possible. It is nobody’s business but yours and your Minnesota bankruptcy attorney and most people would prefer to keep it this way.

DO NOT Rack up your Debts before filing. If you have made the decision to file for bankruptcy, it might be tempting to go for one last shopping spree and really go wild on your debts. If you have the intention to eliminate these debts in a bankruptcy, what could be the harm? Well, first of all, it will not work and you could get in trouble in the process. Just because you are filing for bankruptcy does not mean you should ignore your financial responsibilities.

DO NOT sell or transfer assets before filing. If you sell or give away any assets before filing for bankruptcy for less than true market value, then the court will most likely get it back and use it to pay your creditors. You may think you are protecting some of your assets or perhaps helping someone out by giving it to them but this is not the case. You will need to be upfront about these transactions when discussing bankruptcy with your Minneapolis bankruptcy attorney. He will advise you on what is best in these instances.

DO NOT file and run. If you have been in contact with a Minnesota bankruptcy attorney about filing for bankruptcy, it’s important that you remain in touch with them before, during and after your debt have been discharged. Your Minneapolis bankruptcy lawyer may need to contact you about issues and questions pertaining to your case. Keep your phone number and email address current and if you have moved house or switched numbers, make sure you let them know.

Make sure you read Filing for Bankruptcy? Four Things You Need to Do to get even more hints of what to do before filing your bankruptcy case and contacting a Minnesota bankruptcy attorney.

Choosing to file for bankruptcy is not an overnight decision. The decision to file for bankruptcy should be something you have thought long and hard about. You should discuss this option with your spouse and you should weigh both and pros and the cons involved. If you have decided that bankruptcy is definitely an option you want to consider, then you are probably a little confused on what to do next. The four tips below can help you out:

Get the help you need – First and foremost, make sure you contact an experienced MN bankruptcy attorney. Look for a company that has the testimonials and credentials in the realm of bankruptcy. You should also look for a Minnesota bankruptcy lawyer that offers a free initial consultation as you do not want to incur even more debt simply by making an appointment to get help.

Maintain good financial records – Go through your financial files and start digging through the various receipts, payroll check stubs, bank account statements, bills, mortgage records and tax returns. You are going to need these items when you file for bankruptcy but it is also a good idea to organize them now rather than later to determine just how much debt you are looking at. Seeing the numbers in front of you can help you make a more informed decision on whether filing for bankruptcy is the right decision for you. Try to keep track of all the smaller things from now on too including any medical costs, auto expenses food expenses and creditor letters.

Be completely honest about your situation – many people believe there is a huge stigma surrounding the bankruptcy process and thus will feel shame and embarrassment when they speak to a Minnesota bankruptcy attorney. One of the things you need to let go of before you can begin the bankruptcy process is this shame. There is no need to lie to your attorney in order to help your situation. A Minnesota bankruptcy lawyer is not there to judge you; he is there to help. You can help him do his job by being completely upfront about your debt and your financial situation.

Stay on top of your house and vehicle payments – filing for bankruptcy does not mean you have to lose your house and car. You may be able to keep these secure debts if you are willing to work for it. One of the best ways to do this is to continue making mortgage and car repayments every month. Once you have done the monthly grocery shop and fueled the car, if there is still money leftover, put it towards your house and car payments to help your situation down the road.

Make sure you read Considering Filing for Bankruptcy? Six Things You Should Never Do to get even more hints of what to avoid when it comes to your bankruptcy case. A Minnesota bankruptcy attorney can help you understand both the Chapter 7 and Chapter 13 bankruptcy process. However, in the end, it is your decision on whether bankruptcy is the right solution for you.