Michigan Bankruptcy Exemptions

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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 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? 

Michigan Bankruptcy Exemptions

All law references are to the Michigan Compiled Laws Annotated unless otherwise noted.

Homestead

600.5451 - Real property, including condominium, up to $37,775 (if over 65 or disabled, up to $56,650); but may not exceed one 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, jewelry, appliances, utensils and books up to $600 each or $3,775 total; food and fuel to last six months;  amily pictures; church pew, slip or seat up to $650 for the entire family; professional prescribed health aids; motor vehicle up to $3,475; household pets up to $650; crops, feed and animals up to $2,525; computer and accessories up to $650; 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 $1,245,475. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)

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 $2,525 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.

Finding the Michigan Homestead Exemption Statute

Michigan's homestead exemption is found in the Michigan Compiled Laws at MCL 600.5451(n). To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.

The Michigan exemption statute can be found at the Michigan Legislature.

Periodic Adjustments of Michigan Exemption Amounts

The Michigan Department of Treasury adjusts the Michigan exemption amounts every three years for inflation, starting in 2005. The last adjustment was in April 2014; the next adjustment will be in April 2017. You can find the most recently updated figures at the Michigan Department of Treasury in the Economic Reports section.

by: , J.D.

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