Like all states, Michigan has its own set of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy.
In Michigan, you may use either the Michigan state exemptions (listed below, but be sure to read "Can You Use Michigan's Bankruptcy-Only Exemptions"), or the federal bankruptcy exemptions (you can find these in Federal Bankruptcy Exemptions). You cannot mix and match from each list. If you choose to use the Michigan state exemptions, you may also use any applicable amounts in the federal nonbankruptcy exemptions.
Unless noted otherwise, if a couple is married and filing jointly in Michigan, each spouse may claim the full amount of each exemption. This is informally called “doubling.”
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
Can You Use Michigan's Bankruptcy-Only Exemptions?
Michigan, along with seven other states, has an exemption scheme that applies only in bankruptcy (which means you can’t use them against judgment creditors that try to take your property in other situations). In 2011, the Bankruptcy Appellate Panel of the Sixth Circuit ruled that Michigan’s bankruptcy only exemption scheme (at Michigan Compiled Laws 600.5451) is unconstitutional. In re: Schafer, 2011 WL 650545 (6th Cir. BAP (Mich.)). It is unclear what courts are bound by this decision – all bankruptcy courts in Michigan, or just those in the Western District. For now, it’s wise to check with a local bankruptcy attorney regarding which exemptions to use.
Listed below are the Michigan bankruptcy-only exemptions. If these are not available to you, you may have to use the Michigan general exemptions. Check with your local bankruptcy court to see which exemptions to use (and to get a list of the Michigan general exemptions) or consult with a local bankruptcy attorney. And remember, you can also choose to use the federal bankruptcy exemptions.
Michigan Bankruptcy-Only Exemptions
All law references are to the Michigan Compiled Laws Annotated unless otherwise noted.
Homestead
600.5451 - Real property, including condominium, up to $35,300(if over 65 or disabled, up to $52,925); but may not exceed 1 lot in a city, town, or village, or 40 acres elsewhere. Spouse or child of deceased owner may claim the exemption. Unmarried co-owners and spouses may not double. Tenancies by the entirety are exempt without limit as to debts of one spouse.
Personal Property
600.5451 - Clothing; household goods, furniture, appliances, utensils and books up to $550 each or $3,525 total; food and fuel to last 6 months; building and loan association shares up to $1,175 par value, in lieu of homestead exemption; family pictures; church pew, slip or seat up to $600 for the entire family; professional prescribed health aids; motor vehicle up to $3,250; household pets up to $600; crops, feed and animals up to $2,350; computer and accessories up to $600; burial plots and cemeteries.
Wages
600.5311 - 60% of earned but unpaid wages for head of household; 40% for others; subject to following minimums: $15 per week plus $2 per week for each dependent other than spouse for head of household; $10 per week for others.
Pensions
11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,150.
38.559(6); 38.1683 - Firefighters, police officers.
38.2308; 38.1683 - Judges and probate judges.
38.1057; 38.1683 - Legislators.
38.1346; 38.1683 - Public school employees.
38.40; 38.1683 - State employees.
600.5451 - ERISA-qualified benefits as well as IRAs and Roth IRAS, except contributions within last 120 days.
Public Benefits
18.362 - Crime victims' compensation.
35.1027 - Vietnam veterans' benefits.
35.926 - Veterans' benefits for WWII veterans.
35.977 - Korean War veterans' benefits.
400.63 - Social welfare benefits.
418.821 - Workers' compensation.
421.30 - Unemployment compensation.
Tools of Trade
600.5451 - Tools, implements, materials, stock, apparatus, and other things needed to carry on an occupation up to $2,350 total.
600.6023 - Arms and accoutrements you are required to keep.
Insurance
500.2207 - Life insurance.
500.2210 - Trust funds or life insurance policies that are employer-sponsored.
500.4054 - Life, annuity, or endowment proceeds if policy or contract prohibits use to pay creditors.
500.8181 - Fraternal benefit society benefits.
600.5451 - Disability, mutual life, or health benefits.
Miscellaneous
449.25 - Business partnership property.
Other
Add any applicable Federal Nonbankruptcy Exemptions.
Confirming Exemptions
This list includes the majority of bankruptcy exemptions available in Michigan. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, Michigan may have changed the amounts since this list was last updated in June of 2011. And, as discussed above, these bankruptcy-only exemptions may not be available in some Michigan bankruptcy courts. Consider cross-checking this list with www.legalconsumer.com, which updates the state exemption amounts regularly, checking with your local bankruptcy court, or consulting with a local bankruptcy attorney.
