Minnesota Bankruptcy Exemptions and the Law
Objections to Minnesota bankruptcy exemptions are a common occurrence in Chapter 7 hearings. Most often, a creditor believes that turn-over of assets could result in distribution of assets or dismissal of the case. Distribution of assets rarely exceeds pennies on the dollar, yet dismissal creates a free for all atmosphere in which the quickest and most aggressive creditor may recovery all debts fully to the exclusion of all other creditors. To prevent either of these needless situations, full disclosure of all property owned, and designation of an appropriate Minnesota bankruptcy exemption for all property retained prevents creditors from prevailing during hearings on motions objection to exemptions.
The hearing procedure
Assets are claimed as exempt in claim form H. Testimony regarding exemptions is taken under oath during the 341 hearing. The combination of these two events, plus independent verification of extraneous records, creates a potential for conflict. Slight variations may be harmless error. Yet an intentional act designed to deceive creditors will result in one of several sanctions available to the court.
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