Take a $900,000 house with a $300,000 mortgage. That’s $600,000 of equity, and say a credit card company just won a judgment against you.
Put the house on a lot in Austin and the card company can’t force a sale to reach a dime of it. Put the same house in Edina and the same card company is looking at $60,000 the homestead exemption doesn’t cover.
Minnesota’s homestead exemption is generous. It’s just not Texas. And the strangest part is that nobody forced that cap on Minnesota.
This is another round of the Minnesota-versus-Texas scorecard that starts with wages at /news/minnesota-vs-texas-wage-garnishment-571-922/, and the companion to the round on the stuff inside the house, at /news/minnesota-vs-texas-personal-property-exemptions-550-37/. The house is where Texas earned its reputation. It’s also where federal bankruptcy law finally pushed back.
Texas measures your homestead in acres, never dollars
There’s no dollar figure in it anywhere.
The constitution sets the shape. A homestead “not in a town or city, shall consist of not more than two hundred acres of land,” and a homestead in a city, town, or village “shall consist of lot or contiguous lots amounting to not more than 10 acres of land, together with any improvements on the land”. Tex. Const. art. XVI, § 51. The Property Code tracks it, and trims the rural number for single people: 200 acres for a family, “not more than 100 acres” for a single adult. Tex. Prop. Code § 41.002(a)–(b).
Ten acres in town. The improvements ride along. A ten-acre lot in a Texas city with a $9 million house on it is, as far as the exemption is concerned, the same as a ten-acre lot with a trailer.
Then the protection:
The homestead of a family, or of a single adult person, shall be, and is hereby protected from forced sale, for the payment of all debts except for:
— Tex. Const. art. XVI, § 50(a)
The list after “except for” is the whole game. Purchase money. Property taxes. An owelty of partition, which includes what one spouse owes the other for the house after a divorce. A refinance of a lien already on the house. Work and materials for improvements, if the paperwork follows a long set of rules. A home equity loan meeting the constitution’s requirements. A reverse mortgage. And converting a manufactured-home lien to real property. § 50(a)(1)–(8).
A credit card isn’t on the list. Neither is a medical bill, a personal guaranty, or a judgment for a car accident you caused. Texas goes a step further than most people realize: “No mortgage, trust deed, or other lien on the homestead shall ever be valid unless it secures a debt described by this section”. § 50(c). You can’t even sign a lien on your Texas homestead for a debt that isn’t on the list, let alone have a creditor impose one.
Texas even fences in the bank
The home equity loan Texas allows comes with conditions that read like they were written by someone who’d been burned. The total of all loans against the house can’t exceed “80 percent of the fair market value of the homestead on the date the extension of credit is made”. § 50(a)(6)(B). The loan has to be “without recourse for personal liability against each owner and the spouse of each owner, unless the owner or spouse obtained the extension of credit by actual fraud”. § 50(a)(6)(C). And it “may be foreclosed upon only by a court order”. § 50(a)(6)(D).
Without recourse means the lender gets the house and nothing else. Absent fraud, no deficiency judgment chasing you afterward. Compare that to the Minnesota second-mortgage debt buyers I wrote about at /news/minnesota-zombie-second-mortgage/.
How does Minnesota protect a homestead?
By acreage and by dollars.
The homestead may include any quantity of land not exceeding 160 acres. The exemption per homestead, whether the exemption is claimed by one or more debtors, may not exceed $540,000 or, if the homestead is used primarily for agricultural purposes, $1,350,000, exclusive of the limitations set forth in section 510.05.
— Minn. Stat. § 510.02, subd. 1
Those figures can move on July 1 of an even-numbered year, when the inflation index has moved enough, under § 550.37, subd. 4a. § 510.02, subd. 2. The Department of Commerce’s corrected notice put them at $540,000 and $1,350,000 starting July 1, 2026, up from $510,000 and $1,275,000. If you’ve read $510,000 somewhere, including on this site, that was the 2024 number.
“Exclusive of the limitations set forth in section 510.05” is the part that matters for my $900,000 house. Section 510.05 says the exemption “shall not be reduced by and shall not extend to any mortgage lawfully obtained thereon,” along with tax liens and a few other charges. So the mortgage comes off the top, and the $540,000 protects equity. $600,000 of equity, $540,000 protected, $60,000 exposed. The five kinds of debt that get through a Minnesota homestead anyway, and what a judgment creditor actually has to do before it can push a sale, are at /news/minnesota-homestead-exemption-creditors/. I won’t re-walk them.
Minnesota beats Texas on acreage in town, and it only took until 2007
Here’s one Minnesota wins outright. A Texas city homestead tops out at ten acres. A Minnesota homestead can run to 160 acres wherever it sits.
That’s newer than you’d think. Until 2007, the statute said: “If the homestead is within the laid out or platted portion of a city, its area must not exceed one-half of an acre.” The Legislature struck that sentence, raised the cap from $200,000 to $300,000, and added the inflation adjustment, in two identical bills the governor signed May 21, 2007. 2007 Minn. Laws ch. 105, § 2; ch. 106, § 11. A bankruptcy court in 2005 was still applying the half-acre rule to a Minnesota debtor’s 0.83-acre lot. In re Maronde, 332 B.R. 593, 595–96, 599 (Bankr. D. Minn. 2005).
So a Minnesotan with a five-acre lot inside city limits is fine on acreage. He just runs out of dollars first.
Minnesota used to be Texas
That’s the part I didn’t expect.
You’d think the Minnesota Constitution was the reason for the cap. It says “A reasonable amount of property shall be exempt from seizure or sale for the payment of any debt or liability. The amount of such exemption shall be determined by law.” Minn. Const. art. I, § 12. And in 1987 the Minnesota Supreme Court used that clause to strike down an exemption with no value limit at all, holding that it “prohibits the legislature from exempting an unreasonable amount of property.” In re Tveten, 402 N.W.2d 551, 557 (Minn. 1987) (quoting In re How, 59 Minn. 415, 419 (1894)). I covered Tveten at /news/minnesota-bankruptcy-exemptions-state-vs-federal/.
Two years later, a bankruptcy trustee tried exactly that argument, contending in 1989 that the homestead exemption was unconstitutional under Tveten “because it has only area limits but no value or dollar limit.” In re Haggerty, 448 N.W.2d 363, 363 (Minn. 1989). The court said no. Minnesota’s homestead exemption, it wrote, “has been exclusively area limited since 1858”. Id. at 364. And it held “that area (or quantity for tangible property) limits are objective criteria limiting the homestead exemption to a reasonable amount.” Id. at 366. The size of the homestead, the court said, “is better left to the legislature.” Id. at 367.
So for 135 years, Minnesota protected a homestead the way Texas does: by acreage, with no dollar figure. The court even quoted itself from 1889: “Unfortunately our statute fixes no limit as to value upon a homestead exemption. It must be confessed that such a law may be greatly abused, and permit great moral frauds; but this is a question for the legislature, and not for the courts.” Id. at 366 (quoting Jacoby v. Parkland Distilling Co., 41 Minn. 227, 231 (1889)).
The Legislature answered in 1993. It wrote in the first dollar cap: “The value of the homestead exemption, whether the exemption is claimed jointly or individually, may not exceed $200,000 or, if the homestead is used primarily for agricultural purposes, $500,000”. 1993 Minn. Laws ch. 79, § 2 (signed May 3, 1993). Three and a half years after the Supreme Court told it the constitution didn’t require one.
Nobody made Minnesota cap the homestead. It chose to. It could choose differently.
In bankruptcy, even a Texas homestead can hit a dollar cap
In 2005, Congress went after what a House report called the “mansion loophole”. Here’s the fix, and with a few exceptions it applies whenever a debtor claims a state homestead exemption in bankruptcy on an interest acquired in the last 1,215 days:
(p)(1) Except as provided in paragraph (2) of this subsection and sections 544 and 548, as a result of electing under subsection (b)(3)(A) to exempt property under State or local law, a debtor may not exempt any amount of interest that was acquired by the debtor during the 1215-day period preceding the date of the filing of the petition that exceeds in the aggregate $125,000 in value in—
— 11 U.S.C. § 522(p)(1) (codified figure; adjusted below)
The $125,000 is indexed. For cases commenced on or after April 1, 2025, it’s $214,000. 90 Fed. Reg. 8941 (Feb. 4, 2025). And 1,215 days is about three years and four months.
The Fifth Circuit has applied it to cut a Texas homestead down to size. In Kim v. Dome Entertainment Center, Inc., a debtor claimed what the court called “an unlimited homestead exemption under Texas law”, and the cap held him to $136,875, the figure then in effect, because he’d acquired the house inside the window. 748 F.3d 647, 650, 653–54 (5th Cir. 2014). The court quoted the House report: the section “restricts the so-called ‘mansion loophole’”. Id. at 654. And it said plainly that “a Texas debtor must select between federal exemptions set forth in § 522(d) and the exemptions provided under state law.” Id. at 656.
Two more rules make the move-to-Texas plan slower than the legend. A debtor generally gets the exemptions of the state where he’s been domiciled for the 730 days before filing. 11 U.S.C. § 522(b)(3)(A). And the 1,215-day cap ignores equity rolled over from a previous home only “if the debtor’s previous and current residences are located in the same State.” § 522(p)(2)(B). Sell the Minnesota house, buy a bigger one in Texas, and file two and a half years later, and the cap still applies to the Texas house.
It bites Minnesotans too
You might figure § 522(p) is a Texas problem. It isn’t. In Bruess v. Dietz, a Minnesota debtor claimed her one-third interest in a Brown County homestead. Her father had signed a quitclaim deed to her in 2010, but it wasn’t recorded until January 14, 2013, 700 days before she filed. The bankruptcy court found she didn’t acquire the interest until the recording, and the Eighth Circuit’s bankruptcy appellate panel affirmed a cap of $155,675, the figure in effect at the time. 539 B.R. 560, 562–63, 567 (B.A.P. 8th Cir. 2015).
So a Minnesotan who inherits a house, gets deeded into one, or buys one with cash from somewhere other than a prior Minnesota home can run into the federal cap well before the $540,000 state cap. For a Minnesotan in that spot, the federal number can be the one that matters.
Can I pay down my mortgage before I file?
Sometimes. The Eighth Circuit is friendlier about it than you’d expect.
The 2005 act added § 522(o), which reduces a homestead exemption to the extent its value came from nonexempt property the debtor disposed of in the 10 years before filing “with the intent to hinder, delay, or defraud a creditor”. In 2008 the Eighth Circuit took a Minnesota case in which the debtor, the day he filed, paid $11,500 of nonexempt money onto his mortgage against a $91,250 homestead claim. Addison v. Seaver, 540 F.3d 805, 811 (8th Cir. 2008). The court held the claim was subject to both § 522(o) and Minnesota’s own fraudulent-transfer statute, Minn. Stat. § 513.44(a). Id. Then it reversed the finding of fraud. The facts against him, apart from a lawsuit or threat of one, described “a debtor’s simple conversion of nonexempt property to exempt property on the eve of bankruptcy, which we have long held to be permissible.” Id. at 814. Its bottom line: the debtor was placing “some (but not all or substantially all)” of his assets beyond creditors’ reach, “something our precedent permits.” Id. at 817.
There’s a line, though, and Minnesota debtors have found it. In 2005 a bankruptcy court in Minneapolis denied a Minnesota debtor $18,750.46 of homestead exemption under § 522(o) after he sold a truck and trailer days before filing and put the money into his home equity line, with several badges of fraud on the record. Maronde, 332 B.R. at 598, 600–01. And in 1988 the Eighth Circuit upheld the denial of a discharge to a physician who owed creditors close to $19,000,000 and moved about $700,000 into a then-unlimited Minnesota exemption in seventeen transfers. In the court’s borrowed phrase, he “did not want a mere fresh start, he wanted a head start.” Norwest Bank Neb., N.A. v. Tveten, 848 F.2d 871, 872–73, 876 (8th Cir. 1988). The general rules on when a transfer looks like fraud are at /news/minnesota-fraudulent-transfer-uvta/.
The difference between those cases is the evidence around the payment, not the payment. Which is exactly why nobody should do this without a lawyer looking at the whole picture first.
The scorecard
Texas takes the house, and it isn’t close: no dollar cap, a short list of debts that can reach it, liens void unless the constitution blesses them, and home equity loans with no personal liability. Minnesota takes acreage in town, and the fact that its cap is a choice the Legislature made in 1993, not something the constitution forced. And in bankruptcy, Congress drew one line through both states. Inside 1,215 days, a mansion in Austin and a deeded farmhouse in Brown County can run into the same federal number.
Madgett Law, LLC
Madgett Law, LLC helps Minnesotans take stock of what they own and what’s exposed to creditors before a claim arrives, and handles exemption fights when a creditor comes after a home or other property after judgment. That planning work is on our distressed asset protection page, and the alternatives we look at before anyone files are on our bankruptcy avoidance page. When the numbers point to a bankruptcy filing, we say so and refer you to bankruptcy counsel. If a judgment creditor is looking at your house, send us a message.
Sources: Tex. Const. art. XVI, § 50(a)(1)–(8) (forced-sale protection and exceptions), § 50(a)(6)(B)–(D) (home equity: 80 percent limit; without recourse; court-ordered foreclosure), § 50(c) (no other lien valid), § 51 (200 rural acres; 10 acres in a city, town, or village); Tex. Prop. Code § 41.002(a)–(b) (urban and rural homestead; 100 acres for a single adult) (Texas Constitution and Statutes, Texas Legislative Council). Minn. Const. art. I, § 12; Minn. Stat. § 510.02, subds. 1–2 (2026); § 510.05 (mortgages and other charges); 2007 Minn. Laws ch. 105, § 2, and ch. 106, § 11 (identical amendments to § 510.02); Minnesota Department of Commerce, Adjustments of Dollar Amounts, Official Notice (updated June 29, 2026), and Historic Adjustments (June 25, 2026) (homestead amounts effective July 1, 2026 and July 1, 2024). 11 U.S.C. § 522(b)(3)(A) (730-day domicile rule), (o) (10-year intent rule), (p)(1), (p)(2)(B) (1,215-day cap; same-state rollover) (United States Code, 2024 ed., govinfo); Judicial Conference of the United States, Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases, 90 Fed. Reg. 8941 (Feb. 4, 2025) (§ 522(p) at $214,000 for cases commenced on or after April 1, 2025). In re Tveten, 402 N.W.2d 551, 557 (Minn. 1987); In re How, 59 Minn. 415, 419 (1894); In re Haggerty, 448 N.W.2d 363, 363–64, 366–67 (Minn. 1989); Jacoby v. Parkland Distilling Co., 41 Minn. 227, 231 (1889); 1993 Minn. Laws ch. 79, § 2 (amending § 510.02); Norwest Bank Neb., N.A. v. Tveten, 848 F.2d 871, 872–73, 876 (8th Cir. 1988); Addison v. Seaver, 540 F.3d 805, 811, 814, 817 (8th Cir. 2008); Bruess v. Dietz (In re Bruess), 539 B.R. 560, 562–63, 567 (B.A.P. 8th Cir. 2015); In re Maronde, 332 B.R. 593, 595–96, 598–601 (Bankr. D. Minn. 2005); Kim v. Dome Entm’t Ctr., Inc., 748 F.3d 647, 650, 653–54, 656 (5th Cir. 2014). This article is general information about Minnesota law, not legal advice. Reading it does not create an attorney–client relationship, and no outcome is promised or implied.