30 Oct Minnesota Homestead Exemption: Increased to $300,000 and 160 Acres, or $750,000 for Farmers
In many states, you can choose between the federal bankruptcy law exemptions and your state exemptions, whichever protects your property the best. The federal bankruptcy exemptions provide for an exemption of $20,200 for your home equity, which usually means $40,400 for a joint case. That’s not a very generous exemption.
However, Minnesota allows debtors to choose either federal or state exemptions, and the state exemption just got bigger. Effective August 1, 2007, the Minnesota homestead exemption increased from $200,000 to $300,000; the area limit increased from 1/4 acre to 160 acres for all debtors.
Under the old law, city dwellers were subject to the 1/4 acre cap. Now, all debtors can claim 160 acres no matter where their property is located. Rural farm property continues to enjoy a bigger dollar limit, though; the exemption for such property is $750,000 rather than the $300,000 applicable to all other homestead property. Minnesota’s exemptions also have “extra-territorial” application. This means you don’t have to be a resident of Minnesota to claim Minnesota’s exemptions. This can important if you’ve recently moved from Minnesota, and have taken your home equity with you when you moved, by “rolling it over” into a new homestead in another state.
If you have substantial equity in your home and have just moved from Minnesota, the 2005 Bankruptcy Reform Act may require that you use Minnesota’s exemptions even though you no longer reside in Minnesota. The Act’s convoluted rules require that you do so, if you have moved in the last two years, but only if the moved-from state allows its exemptions to be used by non-residents. Minnesota does indeed allow its exemptions to be used by non-residents. In this respect, Minnesota has you covered, even if you’ve moved.
Consult an experienced bankruptcy attorney to verify that you can claim the exemptions of Minnesota if you have recently moved from this state.
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