Qualifying For Chapter 7 and Protecting Assets now Easier

By David Kelly, Minnesota Bankruptcy Attorney

Easier Qualifying for Chapter 7 Bankruptcy in Minnesota

The primary requirement for being able to file a Chapter 7 bankruptcy is to have your income below a certain level. Stated most simply, to qualify for Chapter 7 you want your income to be lower than the median income for your household size in your state. These levels are set by the Department of Justice, US Trustee’s Office; and new, higher numbers came out recently on April 1st. If your income is slightly above the median, there is a means test that you might be able to pass which would allow you to still file a Chapter 7. Doing the means test, however, can sometimes be an invitation to a close scrutiny of the case. Being below the median is best. Here are the April 2022 numbers and how much they just went up.

Minnesota Median Household Income April 2022

One person:    $  65,514 — Up $2,490

Two people:    $  86,358 — Up $3,875

Three people:  $ 106,445 — Up $4,776

Four people:   $ 125,753 — Up $5,533

Five people:   $ 135,653 — Up $6,543

Six people:    $ 145,553 — Up $7,443

More information at https://mn-bankruptcy.com/chapter7.html

Easier Protection for Your Stuff in Minnesota Chapter 7

As soon as you file a Chapter 7 bankruptcy, the court appoints a trustee whose job it is to find assets that can be used to pay all or part of your debt. You really want the trustee to not be able to find any assets, or certainly not much for assets. The way to keep your assets away from the trustee is to claim them as exempt. What you can claim as exempt and how much is obviously very important. In Minnesota you have a choice between a state exemption list and a federal exemption list. In this post I am only talking about the federal list. The federal exemptions just went up in every category. Here are a few typical items and how much they went up. These are just a few examples. It is not anywhere near a complete list.

April 2022 Federal Exemptions

Household goods  $14,875  -  Up $1,475

Car              $ 4,450  -  Up $  450

Tools of Trade   $ 2,800  -  Up $  175

Cash value of
Life Insurance   $14,875  -  Up $1,475

Catch-all        $15,425  -  Up $1,525

More information at https://mn-bankruptcy.com/exemptions.html

There is now word on the street that a round of increases to the Minnesota state exemption list is being contemplated for July 1, 2022. Watch my blog for news about that.

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