Minnesota Bankruptcy Guide

Complete guide to filing bankruptcy in Minnesota, including current median income requirements, Minnesota's exceptionally generous homestead exemption up to $450,000, bankruptcy court information, and how to find qualified bankruptcy attorneys throughout Minnesota.

Minnesota Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in Minnesota, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$69,253	$5,771
2 people	$88,535	$7,378
3 people	$104,062	$8,672
4 people	$124,176	$10,348
5 people	$133,176	$11,098
6 people	$142,176	$11,848

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program.

Calculate Your Minnesota Eligibility

Minnesota Bankruptcy Exemptions

Minnesota does not allow bankruptcy filers to choose federal exemptions. All Minnesota bankruptcy filers must use Minnesota state exemptions. However, Minnesota has some of the most generous exemptions in the nation, particularly its $450,000 homestead exemption.

Minnesota Homestead Exemption

Up to $450,000 ($1,125,000 if used for agricultural purposes).

Minnesota's homestead exemption is one of the most generous in the United States. The standard homestead exemption protects up to $450,000 of equity in your primary residence. If the homestead is used for agricultural purposes, the exemption increases to an extraordinary $1,125,000.

The exemption applies to real property including houses, condominiums, mobile homes, manufactured homes, and co-ops that serve as your principal residence. The property must be your principal residence at the time of filing bankruptcy.

Minnesota's homestead exemption applies to land up to 160 acres, regardless of whether in the city or country. This exceptionally generous exemption means virtually all Minnesota homeowners can protect their homes entirely in Chapter 7 bankruptcy, even in expensive markets like Minneapolis and St. Paul suburbs.

Minnesota Vehicle Exemption

Up to $5,000 (or $50,000 if modified for disability).

Minnesota allows you to protect up to $5,000 of equity in one motor vehicle. If the vehicle has been modified to accommodate a disability (wheelchair lift, hand controls, etc.), the exemption increases dramatically to $50,000.

This is a generous vehicle exemption that protects most financed vehicles and provides exceptional protection for disability-modified vehicles.

Minnesota State Exemptions

Minnesota bankruptcy exemptions include:

• Homestead: $450,000 ($1,125,000 if agricultural)
• Vehicle: $5,000 ($50,000 if modified for disability)
• Household Goods and Furnishings: $11,975 total
• Clothing: $4,350 total
• Jewelry: $3,050 total
• Appliances and Electronic Equipment: $4,350 total
• Books and Musical Instruments: $4,350 total
• Wedding Rings: Unlimited
• Burial Plot: $18,000
• Tools of Trade: $13,000
• Farm Tools and Machinery: $26,000 (for farmers)
• Livestock and Farm Products: $26,000 (for farmers)
• Wildcard: None (no general wildcard exemption in Minnesota)
• Wages: Earnings from work or services performed within 6 months, but not to exceed 75% of disposable earnings or 40 times federal minimum wage per week, whichever is greater

Other Protected Assets

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits under federal law
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits, public assistance, crime victim's compensation
• Life Insurance: Unmatured life insurance policies; life insurance proceeds if beneficiary is spouse or child
• Health Aids: All health aids
• Education Savings: Minnesota 529 education savings plan (Minnesota College Savings Plan)
• Personal Injury Awards: Personal injury recoveries to extent reasonably necessary for support
• Wrongful Death Awards: Wrongful death recoveries
• Earnings of Minor Child: Earnings of minor child

Filing Bankruptcy in Minnesota

Chapter 7 Bankruptcy in Minnesota

Chapter 7 bankruptcy is very commonly filed throughout Minnesota. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in Minnesota, you must pass the means test by having income below the Minnesota median or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Minnesota's exceptionally generous exemptions—$450,000 homestead, $5,000 vehicle exemption, $11,975 household goods, and $13,000 tools of trade—mean that most Minnesota residents can keep all their assets while obtaining a complete discharge of unsecured debts through Chapter 7.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in Minnesota

Chapter 13 bankruptcy allows Minnesota residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is especially useful in Minnesota if your income is too high to qualify for Chapter 7, if you have non-exempt assets you want to protect (extremely rare with Minnesota's generous exemptions unless you have more than $450,000 in home equity), or if you have priority debts like recent taxes or past-due child support. Your monthly payment is based on your disposable income after allowable living expenses.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Court in Minnesota

Minnesota has one federal bankruptcy court district:

District of Minnesota

Main Courthouses: Minneapolis, St. Paul, Duluth, Fergus Falls

The U.S. Bankruptcy Court for the District of Minnesota covers the entire state. The court has multiple divisions to serve Minnesota's geographically diverse population:

Minneapolis Division: Serves the Twin Cities metropolitan area including Minneapolis, suburban Hennepin County, and surrounding counties. This is the busiest division, handling the majority of Minnesota bankruptcy cases due to the Minneapolis metropolitan area's population concentration.

St. Paul Division: Serves St. Paul, Ramsey County, and eastern Minnesota suburbs.

Duluth Division: Serves northeastern Minnesota including Duluth, the Iron Range, and the Lake Superior region.

Fergus Falls Division: Serves western and northwestern Minnesota.

You must file in the district where you have lived for the greater part of the 180 days before filing. Since Minnesota has only one district, all Minnesota residents file in the District of Minnesota, but your case will be assigned to the appropriate division based on your county of residence.

Minnesota Residency Requirements

To use Minnesota bankruptcy exemptions, you must have been domiciled (legally residing) in Minnesota for at least 730 days (2 years) before filing. If you've lived in Minnesota for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

Minnesota does not allow the choice of federal exemptions, so once you meet the residency requirement, you must use Minnesota state exemptions (which are very generous).

Find a Minnesota Bankruptcy Attorney

Most Minnesota bankruptcy attorneys offer free initial consultations. Given the complexity of bankruptcy law and the benefits of Minnesota's generous exemptions, consulting with an experienced Minnesota bankruptcy attorney is highly recommended.

What a Minnesota Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Maximize Minnesota exemptions to protect your assets
• Evaluate whether your home equity is protected under Minnesota's $450,000 homestead
• Calculate whether you qualify for Chapter 7 using the Minnesota means test
• Navigate Minnesota-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in Minnesota

Chapter 7 bankruptcy attorney fees in Minnesota vary by location:

• Minneapolis-St. Paul metro area: $1,300 to $1,900 plus $338 filing fee
• Rochester, St. Cloud, Bloomington: $1,100 to $1,600 plus $338 filing fee
• Duluth area: $1,000 to $1,500 plus $338 filing fee
• Other Minnesota cities and rural areas: $900 to $1,400 plus $338 filing fee

Chapter 13 attorney fees typically range from $3,000 to $4,500 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront.

Twin Cities area attorney fees tend to be higher due to the region's cost of living. Many Minnesota attorneys offer payment plans for Chapter 7 to make bankruptcy more accessible.

Minnesota-Specific Bankruptcy FAQs

Can I keep my house in Minnesota bankruptcy?

Almost certainly yes. Minnesota's $450,000 homestead exemption is one of the most generous in the United States. If you have $450,000 or less in equity, your home is fully protected in Chapter 7 bankruptcy. Even in expensive Twin Cities suburbs like Edina, Wayzata, or Minnetonka, most homeowners are fully protected. For agricultural homesteads, the exemption increases to $1,125,000, protecting virtually all Minnesota farms.

Can I keep my car in Minnesota bankruptcy?

Yes, almost always. Minnesota allows you to exempt up to $5,000 of equity in one motor vehicle. If your vehicle has been modified to accommodate a disability, the exemption increases to $50,000. Most Minnesota residents with car loans have equity well below these amounts and can easily keep their vehicles by continuing payments.

Does Minnesota allow federal bankruptcy exemptions?

No, Minnesota is one of the states that opted out of the federal exemption system. All Minnesota filers must use Minnesota state exemptions. However, this is rarely a disadvantage because Minnesota's state exemptions are far more generous than federal exemptions—the $450,000 homestead compared to federal $27,900 is a massive difference.

What qualifies as an agricultural homestead in Minnesota?

To qualify for Minnesota's $1,125,000 agricultural homestead exemption, the property must be primarily used for agricultural purposes (farming, livestock, dairy, crops). This exceptional exemption protects Minnesota's family farms, allowing farmers to keep their land and operations while discharging other debts in bankruptcy. Consult a Minnesota bankruptcy attorney experienced with agricultural bankruptcies to ensure proper classification.

Can I protect my lake cabin in Minnesota bankruptcy?

Only if it's your primary residence. Minnesota's homestead exemption applies only to your principal residence. A lake cabin, vacation home, or second property does not qualify for the homestead exemption and would be considered non-exempt equity that could be taken by the trustee in Chapter 7. If you have significant equity in a second home, you may need Chapter 13 to protect it or consider other options with your attorney.

How does Minnesota's cold climate affect bankruptcy filings?

Minnesota law specifically protects items needed for the harsh climate. The clothing exemption ($4,350) and household goods exemptions protect winter coats, boots, and cold-weather necessities. Heating fuel and provisions for winter months are also considered necessary household items. Minnesota bankruptcy courts understand the necessity of these items for survival in Minnesota's climate.

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