Updated April 16, 2020
You won't lose everything when filing for bankruptcy in Michigan. You can use Michigan's bankruptcy exemptions to protect the property you'll need to work and maintain a household, such as furnishings, clothing, and a retirement account.
Your other choice—using the federal bankruptcy exemptions—could provide more protection, depending on the assets you own.
Learn more about filing a Michigan bankruptcy.
Some states, including Michigan, allow residents to choose between the state and federal bankruptcy exemptions. You can't protect property by using exemptions from both lists—you must pick the system that will work best for you. If you decide to use Michigan's state exemptions, the federal nonbankruptcy exemptions will be available to you, too.
Here are some of the more common exemptions in Michigan. When reviewing them, you'll want to keep these things in mind:
600.5451 – Equity in real property, including condominium, up to $40,475. If over 65 years old, or if you have a disability, the amount increases to $60,725. Spouses can't double the exemption amount. Tenancies by the entirety are exempt without limit as to debts of one spouse in some situations.
600.5451 – Equity in a motor vehicle up to $3,725.
600.5451 - Clothing; household goods, furniture, jewelry, appliances, utensils, and books, up to $625 per item, and a total value of $4,050; food and fuel to last six months; family pictures; church pew, slip or seat up to $700 for the entire family (cannot double); professionally prescribed health aids; household pets up to $700; crops, feed, and animals up to $2,700; computer and accessories up to $700; burial plots and burial rights.
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 maximum. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)
38.559 - Firefighters, police officers.
38.2308 - Judges and probate judges.
38.1057 - Legislators.
38.1346 - Public school employees.
38.40 - State employees.
600.5451 - ERISA-qualified benefits as well as IRAs and Roth IRAS, except contributions within the last 120 days.
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 - Welfare benefits.
418.821 - Workers' compensation.
421.30 - Unemployment compensation.
Tools of the Trade
600.5451 - Tools, implements, materials, stock, apparatus, and other things needed to carry on an occupation up to $2,550 total.
600.5451 - Arms and accouterments you are required to keep.
500.2207 - Life insurance.
500.2210 - Trust funds or life insurance policies that are employer-sponsored.
500.4054 - Insurance proceeds held by an insurer.
500.8181 - Fraternal benefit society benefits.
600.6023 - Disability, mutual life, or health benefits.
449.25 - Particular business partnership property.
11 U.S.C 541(b)(5)-(6) – Up to $6,424 in an education IRA and up to $6,425 in pre-purchased tuition credits.
Add any applicable federal nonbankruptcy exemptions.
Some people can keep all assets, but that isn't always true. Here's what will happen to nonexempt property:
You'll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?
This list includes the majority of bankruptcy exemptions available in Michigan, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Michigan Compiled Laws or with a local bankruptcy lawyer.
To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?