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 Incomes 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.
Some of the April 2022 Federal Exemption Increases
Now Before Increase Household goods $14,875 $13,400 $1,475 Car $ 4,450 $ 4,000 $ 450 Tools of Trade $ 2,800 $ 2,685 $ 175 Cash value of Life Insurance $14,875 $13,400 $1,475 Catch-all $15,425 $13,900 $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.