Understanding Minnesota Law to Protect Your Property - Part 5

Posted by Charles Nguyen on March 14, 2021 at 7:42 AM

A hand strikes a block with a dark-wood gavel in front of a small white toy house with a red roof, all placed on a wood table to represent understanding Minnesota law to protect your property.Under Minn. Stat. § 550.37, subd. 6, you are allowed to exempt property if your interest in that property consists of “tools, implements, machines, instruments, office furniture, stock in trade, and library reasonably necessary in the trade, business, or profession of the debtor…”.

The Difference Between "Incidental" and "Necessary" For Exemptions in MN

There are limits though on what you can exempt under this law, and how you can protect your property in MN. For example, let’s say you are a self-employed real estate agent and you use your car to pick up signs for a house you have on the market, meet clients, and or drive them to a house. You may think that your car is a machine necessary in your business or profession; therefore, your car should be exempt under this law.

Although that may make sense to you or me, it is not an opinion shared by the courts. The question you have to ask is whether the tool you wish to exempt is incidental to the trade or business. In the case of the real estate agent, your car is incidental; and therefore, not reasonably necessary in the business of selling homes. 

What It Means to Be "Primary to the Trade" in MN

However, let’s say you are self-employed and you own and drive a semi-truck cab and you haul items from one place to another. In this case, you would be able to exempt your semi-truck cab under Minn. Stat. § 550.37, subd. 6 since the machine, in this case, the truck, is primary to the trade. In other words, because the primary trade is hauling items from one place to another, you would not be able to perform your trade without your truck.


So, if you are self-employed, and thinking of filing for bankruptcy, and or if you have questions or are ready to get your life back, reach out to Minnesota’s nicest bankruptcy law firm by going to www.kainscott.com. You won’t regret it!



Topics: property law

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