Filing Chapter 7 Bankruptcy in Minnesota (2026)
Reviewed by DocDraft Legal Team · Minnesota · Last updated August 18, 2026
Chapter 7 bankruptcy is federal law, but the property you keep depends on Minnesota. Minnesota is a choice state: you may elect either the federal 11 U.S.C. 522(d) exemptions or Minnesota's own exemptions, whichever protects more of your property, but you cannot mix the two lists. Minnesota's homestead exemption under Minn. Stat. 510.02 is among the highest in the country and is adjusted every two years for inflation. This page explains that choice, the homestead, vehicle, and personal-property figures under Minn. Stat. 550.37, the means-test median income, and the U.S. Bankruptcy Court for the District of Minnesota where you file. Chapter 7 discharges most unsecured debt but not most student loans, recent taxes, child support, or alimony.
Does Minnesota use state or federal bankruptcy exemptions?
Minnesota is a choice state. Under 11 U.S.C. 522(b), a debtor filing in Minnesota may elect either the federal 522(d) exemptions or the Minnesota exemptions under Minn. Stat. 510.02 and 550.37. You pick one full set, whichever protects more of your property, and cannot combine the federal and state lists.
Can I keep my house if I file Chapter 7 in Minnesota?
Often yes. Under Minn. Stat. 510.02, Minnesota's homestead exemption protects up to $510,000 of equity in a residential homestead, or up to $1,275,000 if used primarily for agriculture, on a lot of 160 acres or less, effective July 1, 2026. If your equity fits, Chapter 7 generally lets you keep the home.
Can I keep my car if I file Chapter 7 in Minnesota?
Usually yes if your equity is modest. Under Minn. Stat. 550.37, subd. 12a, Minnesota exempts one motor vehicle up to $10,000, or up to $25,000 if the vehicle has been modified for or is used by a physically disabled person. Equity above your figure may be reachable by the trustee unless the federal set covers it.
What is the income limit to file Chapter 7 in Minnesota?
For cases filed on or after July 15, 2026, the U.S. Trustee median income figures for Minnesota are $77,696 for one earner, $98,328 for two, $126,487 for three, and $149,882 for four, adding $11,100 per additional person. At or below your household figure, you pass the first part of the means test.
Minnesota's Choice Rule, the High Minn. Stat. 510.02 Homestead, and the District of Minnesota
Minnesota is a bankruptcy choice state. Under 11 U.S.C. 522(b), a debtor filing in Minnesota may elect either the federal 11 U.S.C. 522(d) exemption set or the Minnesota exemptions, but not a mix of the two. That choice matters because Minnesota's homestead exemption under Minn. Stat. 510.02 is one of the largest in the nation: up to $510,000 of equity in a residential homestead, or up to $1,275,000 if the homestead is used primarily for agricultural purposes, on a lot of 160 acres or less, effective July 1, 2026 and adjusted every two years for inflation. Homeowners with substantial equity almost always choose the Minnesota set for that reason, while renters and low-equity filers often prefer the federal 522(d) list for its portable wildcard. Minnesota also exempts one motor vehicle up to $10,000 (up to $25,000 if modified for a physically disabled person) under Minn. Stat. 550.37, subd. 12a, and household goods up to $12,150 under subd. 4b. Minnesotans file in a single court: the U.S. Bankruptcy Court for the District of Minnesota, which sits in Minneapolis, St. Paul, Duluth, and Fergus Falls.
Relevant Laws
Minnesota Homestead Exemption (Minn. Stat. 510.02)
Sets Minnesota's homestead exemption at up to $510,000 of equity in a residential homestead, or up to $1,275,000 if used primarily for agriculture, on a lot of 160 acres or less, effective July 1, 2026 and adjusted every two years for inflation. This is the exemption that lets many Minnesota homeowners keep their house in Chapter 7.
Minnesota Personal Property Exemptions and Federal Choice (Minn. Stat. 550.37)
Minnesota's core exemption statute, covering the motor vehicle, household goods, tools of trade, wages, and retirement exemptions a debtor may claim. Minnesota did not opt out of the federal exemptions, so a debtor may instead elect the federal 11 U.S.C. 522(d) set; you choose one full list, not a mix.
Minnesota Wage Garnishment Limit (Minn. Stat. 571.922)
Caps how much of a debtor's earnings a creditor can garnish and, by cross-reference in Minn. Stat. 550.37, defines the earnings that are exempt in bankruptcy: the greater of 75 percent of disposable earnings or 40 times the federal minimum hourly wage.
Federal Bankruptcy Code Exemptions and Means Test (11 U.S.C. 522, 707)
The federal law behind Chapter 7. Section 522(b) lets a debtor in a choice state like Minnesota elect the federal 522(d) exemptions instead of the state set, and section 707(b) sets the means test measured against state median income.
Regional Variances
Minnesota Chapter 7 Exemption Table
Homestead
Minn. Stat. 510.02: up to $510,000 of equity in a residential homestead, or up to $1,275,000 if used primarily for agricultural purposes, on a lot of 160 acres or less, effective July 1, 2026 and adjusted every two years. The federal alternative under 11 U.S.C. 522(d)(1) is far smaller, so homeowners with equity usually choose the Minnesota set.
Motor vehicle
Minn. Stat. 550.37, subd. 12a: one motor vehicle up to $10,000 of equity, or up to $25,000 if modified at a cost of at least $3,750 to accommodate a physically disabled owner or user. Equity above the figure may be reachable by the trustee unless covered under the federal set.
Wildcard
Minnesota has no general cash wildcard in its state set, which is one reason low-equity filers often elect the federal 11 U.S.C. 522(d)(5) list, whose wildcard covers roughly $1,675 plus most of any unused homestead amount. Compare both sets before choosing.
Personal property
Minn. Stat. 550.37, subd. 4b: household furniture, appliances, and consumer electronics up to $12,150 in all. Subd. 6 exempts tools, implements, and business property of the debtor's trade, and subd. 4a exempts clothing, food, and utensils, each subject to its own statutory cap.
Wages
Minn. Stat. 550.37 exempts earnings not subject to garnishment under Minn. Stat. 571.922, which shields the greater of 75 percent of disposable earnings or 40 times the federal minimum hourly wage. Recently deposited wages traceable to earnings retain their exempt character for a limited period.
Retirement
Minn. Stat. 550.37, subd. 24: employer-sponsored pension, profit-sharing, and similar retirement plans are exempt, and IRAs and other plans are exempt up to a present value cap adjusted for inflation plus amounts reasonably necessary for support. ERISA-qualified plans are separately excluded from the bankruptcy estate under federal law.
Suggested Compliance Checklist
Confirm the current Minnesota means-test median income
Before you file days after startingCheck your household size against the U.S. Trustee Minnesota median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $77,696 for one, $98,328 for two, $126,487 for three, and $149,882 for four, adding $11,100 per additional person.
Complete the pre-filing credit counseling course
Within 180 days before filing days after startingTake an approved credit counseling course from a provider authorized for the District of Minnesota and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed.
Compare the Minnesota and federal exemption sets and value your assets
Before preparing your schedules days after startingDecide between the Minnesota exemptions (Minn. Stat. 510.02 and 550.37, with the high homestead) and the federal 11 U.S.C. 522(d) list (with a portable wildcard). Value your home, vehicle, and personal property so you can match assets to whichever set protects more. You must choose one full set.
Prepare and file your petition and schedules
Filing day days after startingFile your petition, schedules, and exemption claims in the U.S. Bankruptcy Court for the District of Minnesota, which sits in Minneapolis, St. Paul, Duluth, and Fergus Falls. Filing triggers the automatic stay that pauses collection and garnishment.
Attend the 341 meeting and finish the debtor education course
Before discharge days after startingAttend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm the current Minnesota means-test median income | Check your household size against the U.S. Trustee Minnesota median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $77,696 for one, $98,328 for two, $126,487 for three, and $149,882 for four, adding $11,100 per additional person. | - | Before you file |
| Complete the pre-filing credit counseling course | Take an approved credit counseling course from a provider authorized for the District of Minnesota and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed. | - | Within 180 days before filing |
| Compare the Minnesota and federal exemption sets and value your assets | Decide between the Minnesota exemptions (Minn. Stat. 510.02 and 550.37, with the high homestead) and the federal 11 U.S.C. 522(d) list (with a portable wildcard). Value your home, vehicle, and personal property so you can match assets to whichever set protects more. You must choose one full set. | - | Before preparing your schedules |
| Prepare and file your petition and schedules | File your petition, schedules, and exemption claims in the U.S. Bankruptcy Court for the District of Minnesota, which sits in Minneapolis, St. Paul, Duluth, and Fergus Falls. Filing triggers the automatic stay that pauses collection and garnishment. | - | Filing day |
| Attend the 341 meeting and finish the debtor education course | Attend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions. | - | Before discharge |
Frequently Asked Questions
Under Minn. Stat. 510.02, Minnesota protects up to $510,000 of equity in a residential homestead, or up to $1,275,000 if the homestead is used primarily for agricultural purposes, effective July 1, 2026. The homestead must sit on a lot of 160 acres or less, and the figures are adjusted every two years for inflation.
It depends on the exemption. Spouses who both own and occupy the Minnesota homestead generally share the single Minn. Stat. 510.02 homestead cap rather than doubling it, but many personal-property exemptions under Minn. Stat. 550.37 can be claimed by each filing spouse. Whether to file jointly is worth discussing with an attorney.
Under Minn. Stat. 550.37, subd. 12a, Minnesota exempts one motor vehicle up to $10,000 of equity, or up to $25,000 if the vehicle has been modified at a cost of at least $3,750 to accommodate a physically disabled owner or user. Equity above your figure may be reachable unless the federal exemption set covers it.
No. Chapter 7 discharges most unsecured debt like credit cards and medical bills, but it does not erase most student loans, recent income taxes, child support, or alimony, and it will not discharge debts from fraud. Secured debts like a car loan remain unless you surrender the collateral or reaffirm the loan.
Largely yes. Under Minn. Stat. 550.37, earnings not subject to garnishment under Minn. Stat. 571.922 are exempt, and that statute shields the greater of 75 percent of disposable earnings or 40 times the federal minimum wage. Employer-sponsored and most retirement plans are also exempt under Minn. Stat. 550.37, subd. 24.
Other Minnesota guides
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