There’s good news for relatively new Minnesota residents who are struggling to pay their debts. It’s not difficult to meet the residency requirements for filing bankruptcy in Minnesota.
Residents who have lived in Minnesota for as little as 91 days are eligible to file. As long as you’re a state resident, you don’t have to be an American citizen or even a permanent resident to file for Minnesota bankruptcy. Your attorney files your bankruptcy petition in the county you live in.
However, if you want to use Minnesota exemptions to protect property, there are longer residency requirements for them. In the event that you don’t meet the longer requirements, you can still file for bankruptcy in Minnesota. Here’s what you need to know about exemptions, residency requirements, and alternatives to Minnesota exemptions.
What Are Exemptions?
When you file for bankruptcy, the law permits you to shield certain property from creditors with exemptions. Each state makes its own rules related to the bankruptcy exemptions that can be claimed in that state. To make matters more complicated, the federal government also has a schedule of bankruptcy exemptions.
If you meet residency requirements for Minnesota exemptions, you can choose the federal exemption schedule or Minnesota’s. You cannot claim exemptions from both schedules.
Federal and Minnesota exemptions allow you to claim to a certain amount of equity in your home and in a personal vehicle. Here are additional examples of what both schedules also allow you to exempt:
- Personal belongings like clothing, radio, appliances, and furniture
- Tools you need for your job
- Your 401K
- Social Security benefits
- Unemployment insurance
Both exemption schedules allow you to protect much more property than what’s listed here. Our bankruptcy attorneys can provide further details.
Why Exemptions Matter
Exemptions are particularly important when someone is filing for Chapter 7 bankruptcy. The bankruptcy trustee cannot sell exempt assets to pay your creditors. In other words, you keep exempt property.
Even if you’ve lived in the state long enough to claim Minnesota exemptions, federal exemptions may make more financial sense based on your personal circumstances. A professional bankruptcy attorney can help you figure out which schedule of exemptions is right for you.
Residency Requirements for Minnesota Exemptions
You need to live in Minnesota for 730 days (e.g. 2 years) before filing to reach the residency requirements to use Minnesota exemptions. There’s no cause for despair in the event you haven’t resided in this state long enough to claim Minnesota exemptions. You can still file for bankruptcy in Minnesota.
The difference is you may need to use either the federal exemptions or the exemptions allowed in your state of prior residence. You need to be aware that you would have to meet the residency requirements to claim exemptions in your former state. Generally, bankruptcy law considers your state of prior residence is the one you lived in for the 180 days before the last 730 days.
Also, certain states don’t allow former residents to claim their bankruptcy exemptions. Just keep in mind federal exemptions are available to you even if you aren’t eligible for any state’s bankruptcy exemptions.
Contact Walker & Walker Today About Your Case
As long as you have lived in Minnesota for at least three months, you meet the residency requirements to file for bankruptcy in this state. If you’ve lived in Minnesota for less than two years, your length of residency has an impact on what exemptions you can claim.
The experienced attorneys at Walker & Walker Law Offices, PLLC can answer your questions about residency, exemptions, and other matters related to bankruptcy. Contact us today to schedule your free consultation.