If you have recently sold your home or are planning to sell your home prior to filing bankruptcy there are things to consider and discuss with your bankruptcy attorney regarding any remaining home proceeds from the sale. After the sale of the home, the proceeds should be kept separate from general income: wages, bonuses, pension income, and funds from the sale of other assets. The proceeds from the home sale maybe exemptible, if you qualify to use Minnesota exemptions and the sale of the home was within one year of the bankruptcy filing. (Your attorney can help you determine if you are eligible for Minnesota exemptions). It is important to note that home proceeds are not exemptible infinitely. If the home was sold over a year from the filing of the bankruptcy petition and proceeds remain from the home sale, these funds are not exemptible using the Minnesota homestead exemption.
Although, proceeds that were received from the sale of a home that was sold over a year from the filing date of the bankruptcy are not exemptible using the Minnesota homestead exemption, there are other options. If the amount of the proceeds from the sale of the home is not substantial, your attorney may be able to exempt the proceeds using Federal exemptions. But, if the proceeds are substantial and from the sale of a home over a year from the filing date of the bankruptcy petition some additional planning will have to be considered. A debtor can reinvest the funds into a new homestead, although the debtor should be careful not to run afoul of 11 U.S. Section 522(p). The statute sets a dollar amount restriction on the amount of funds that can be exempted in the 1215 days prior to the filing of the bankruptcy petition.
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When it comes to home proceeds and bankruptcy planning, you should speak with an attorney about your options and the best way to protect your assets. Contact the attorneys at LifeBackLaw and see us at www.LifeBackLaw.com and let us help you get your life back.
