One of the biggest concerns when our clients file a bankruptcy is regarding what will happen to their home. The amount of equity a client has in their home, determines how we will proceed with protecting their assets using the bankruptcy code. If a single debtor has more than $25,000 of equity in their home, we will use Minnesota exemptions to protect it. Minnesota exemptions can protect upwards of $400,000 of equity in a home—and that exemption is referred to as the homestead exemption. With the protection in place, our clients need to be aware of exempt assets and non-exempt assets. What does that mean? Assets refer to the items you own, exempt means they are afforded protection and non-exempt means they do not fit under a protected category according to Minnesota bankruptcy law.
Justifiably, clients are concerned about what property is protected in the bankruptcy and what is not protected. Some common examples of non-exempt property in Minnesota include: a second vehicle and recreational vehicles, a second home or vacation home, cash on hand, money in bank accounts, collectables of value, inherited property, and valuable jewelry. Exempt property typically includes one vehicle up to $4,000 in value, reasonable and necessary clothing and household goods and furnishings, wedding rings exchanged at the ceremony, pension or 401(k) funds, and equity in the home, mentioned above.
During the Review and Sign appointment, we ask extensive questions about the assets you own. We want to be thorough and complete because what is disclosed in the petition and schedules of the bankruptcy must be accurate and true. If there are non-exempt assets that we were unable to protect using the Minnesota Code Provisions, do not worry! The trustee’s will send a letter to your attorney detailing the non-exempt portion—most trustees are favorable to a settlement for a smaller value than was originally listed in your bankruptcy. If you do not want to pay to keep some of the non-exempt assets listed in your bankruptcy, you are freely able to surrender them to the bankruptcy estate and the trustee will sell them and give the proceeds to your creditors.
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The different aspects of bankruptcy can be confusing, but there’s no reason why you should be confused when you can contact us and ask any bankruptcy related questions by scheduling an appointment online at www.kainscott.com today! We want you to know the ins and outs of your case, and never be left in the dark or with questions unanswered. You deserve this fresh start!