Your Health Savings Account Can Be Affected In A Minnesota Bankruptcy Case

Did you know that your health savings account can be affected in a Minnesota bankruptcy case? A federal Bankruptcy Appellate Panel upheld Minnesota Bankruptcy Judge Kathleen Sandberg's original ruling that health saving accounts (HSA's) are property of a Chapter 7 bankruptcy estate.

The case that brought this issue to the forefront is Leitch v. Christians. The debtor argued that HSA's were excluded from the bankruptcy estate because of exemptions that allow a debtor to keep "disability benefits" and "payments on account of personal bodily injury." The courts disagreed since HSA's can be withdrawn for any purpose, according to Minnesota law.

Debtors could potentially protect their HSA's under the federal "wildcard" exemption, which allows for an exemption of $12,725 worth of liquid cash assets. HSA's in Chapter 13 bankruptcies will generally remain unaffected by this ruling.

If you are considering bankruptcy in Minnesota and are concerned about your HSA funds, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 for more information specific to your case.

Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com