Know Your Rights: Bankruptcy in Minnesota

If you cannot pay your debts, bankruptcy can give you a fresh start. Federal and Minnesota law protect you during the process. Here is what you need to know.

Your Rights

1. The automatic stay stops all collection the moment you file. As soon as you file your bankruptcy petition, a court order stops collection calls, wage garnishment, lawsuits, and even foreclosure. Creditors who violate the stay can be held in contempt.

2. Most of your property is protected. Minnesota has some of the most generous exemptions in the country. Under Minn. Stat. § 550.37 , you can protect up to $510,000 in home equity, household goods, clothing, and tools of your trade.

3. 75% of your wages are exempt from garnishment. Even before you file, creditors can only take up to 25% of your disposable earnings. Bankruptcy stops garnishment completely.

4. Retirement accounts and benefits are fully protected. Your 401(k), IRA, pension, Social Security, unemployment, workers’ compensation, and public assistance cannot be taken to pay debts.

5. You have the right to choose Chapter 7 or Chapter 13. Chapter 7 wipes out most unsecured debt in about 3 to 4 months. Chapter 13 lets you keep your property and repay debts over 3 to 5 years. You may also choose between Minnesota and federal exemptions.

6. You can ask the court to waive the filing fee. If you cannot afford the filing fee ($338 for Chapter 7 or $313 for Chapter 13), you can request a fee waiver or a payment plan.

7. You have the right to file without a lawyer. You can file on your own (called “pro se”), but bankruptcy law is complicated. Free legal help is available through Legal Aid and the Volunteer Lawyers Network.

What to Do

• Gather your financial records. List all debts, property, income, and expenses. Collect pay stubs, tax returns, and monthly bills for the last 6 months.
• Complete credit counseling before you file. Federal law requires a credit counseling course from an approved agency before you can file. It takes about 60 to 90 minutes and costs $10 to $50.
• Be completely honest on all forms. Hiding property or income is a federal crime and can get your case dismissed or lead to criminal charges.
• Attend your 341 hearing. About 20 to 40 days after filing, you must attend a short meeting with the bankruptcy trustee. Bring a photo ID and proof of your Social Security number.
• Complete the debtor education course after filing. You must finish this second required course before the court will discharge your debts.
• Talk to a lawyer or legal aid first. Many bankruptcy attorneys offer a free first meeting. Legal aid organizations can help you decide if bankruptcy is right for you.

Important Deadlines

Deadline	What It Means
180 days before filing	You must complete credit counseling within this window
20-40 days after filing	You must attend the 341 meeting of creditors
60-90 days after 341 hearing	Chapter 7 discharge is typically granted
3-5 years	Chapter 13 repayment plan length before discharge
8 years	Wait period before filing Chapter 7 again

Get Help

For more detail: See our full guide on this topic:

Filing for Bankruptcy in Minnesota

A plain-language guide to understanding bankruptcy options in Minnesota, including Chapter 7 and Chapter 13, exemptions, and the filing process.

Defending Against Debt Collection Lawsuits in Minnesota

A plain-language guide to understanding your rights when you are sued for a debt in Minnesota, including common defenses and the court process.