Michigan Bankruptcy Exemptions

The Michigan bankruptcy exemptions chart, see below, details the property you can exempt or protect from creditors when you file bankruptcy in Michigan. You may exempt any property that falls into one of the exemptions categories below, up to the dollar amount listed. You will be able to kept this exempted property after you file bankruptcy. Please note that there are certain debts which you will not be able to erase in bankruptcy. (see Non-dischargeable Debts)

In Michigan, you also have the choice of using the federal exemption statutes instead of your Michigan exemptions.

An exemption limit applies to any equity you have in the property. Equity is the difference between the value of the property and what is owed on the property. For example, a car valued at $5000 with a loan of $4500 has an equity value of only $500.

If the property is secured by a loan, such as a car or home, and you are current on the payments and the equity is covered by your exemptions, you may elect to keep making payments on the loan and keep this property through the bankruptcy. If all the equity is not covered by your exemptions the trustee may elect to liquidate this asset and distribute the proceeds. Generally, in this case, you would be entitled to the value of your exemption in the asset as a cash payment.

Bankruptcy law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted.

To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.

When you file bankruptcy in Michigan you may also use certain federal exemptions in addition to your Michigan exemptions.

ASSET

EXEMPTION DESCRIPTION

LAW SECTION

Homestead

Real property including condo to $3500; property cannot exceed 1 lot in town, village, city, or 40 acres elsewhere

Spouse or child of deceased owner may claim homestead exemption

Property held as tenancy by the entirety may be exempt against debts owed by only one spouse

559.214, 600.6023(1)(h), (I), 600.6023(3), 600.6027

SNB Bank & Trust v. Kensey, 378 N.W. 2d 594 (Ct. App.Mich. 1985)

Insurance

Disability, mutual life or health benefits

Fraternal benefit society benefits

Life, endowment or annuity proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors

600.6023(1)(f)

500.8181

500.4054

Miscellaneous

Property of business partnership

449.25

Pensions

Firefighters, police officers

ERISA-qualified benefits

IRAs

Judges

Legislators

Probate Judges

Public school employees

State employees

38.559(6)

600.6023(1)(k)

600.6023(1)(l)

38.825

38.1057

38.925

38.1346

38.40

Personal property

Appliances, utensils, books, furniture & household goods to $1000 total

Building & loan association shares to $1000 par value, in lieu of homestead

Burial plots, cemeteries; church pew, slip, seat

Clothing; family pictures

2 cows, 100 hens, 5 roosters, 10 sheep, 5 swine; hay & grain to last 6 months if you’re a head of household

Food & fuel to last 6 months if you’re a head of household

600.6023(1)(b)

600.6023(1)(g)

600.6023(1)(c)

600.6023(1)(a)

600.6023(1)(d)

600.6023(1)(a)

Public benefits

AFDC

Crime victim’s compensation

Social welfare benefits

Unemployment compensation

Veterans’ benefits for Korean War veterans

Veterans’ benefits for Vietnam veterans

Veterans’ benefits for WWII veterans

Workers’ compensation

330.1158a

18.362

400.63

421.30

35.977

35.1027

35.926

418.821

Tools of trade

Arms & accoutrements you’re required to keep

Tools, implements, materials, stock, apparatus, team, motor vehicle, horse & harness to $1000 total

600.6023(1)(a)

600.6023(1)(e)

Wages

60% of earned but unpaid wages for head of household; else 40$; head of household may keep at least $15 per week plus $2 per week per non-spouse dependent; other may keep at least $10 per week

600.5311

 

 

WILD CARD

NONE

 

For more information on filing bankruptcy in Michigan explore Michigan Bankruptcy Law.