Michigan Bankruptcy Exemptions

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.

Michigan Exemptions v. Federal Bankruptcy Exemptions

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.

Common Michigan Bankruptcy Exemptions

Here are some of the more common exemptions in Michigan. When reviewing them, you’ll want to keep these things in mind:

• Joint filing. Unless otherwise noted, when spouses file together in Michigan, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
• List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
• Legal citations. You’ll find each of the statutes in the Michigan Compiled Laws or the federal law.

Michigan Homestead Exemption

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.

Michigan Motor Vehicle Exemption

600.5451 – Equity in a motor vehicle up to $3,725.

Michigan Wildcard Exemption

None.

Other Michigan Exemptions

Personal Property

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.

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 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.

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 - 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.

Insurance

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.

Other

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.

Nonexempt Property—Property You Can’t Protect With a Michigan Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

• In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
• In Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Michigan Bankruptcy Exemptions

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?