Michigan Bankruptcy Exemptions
Understanding What Property You Can Keep Under State and Federal Law
State vs. Federal: Choosing Your Protection
Under the bankruptcy code, "exempt" property is property that you are allowed to keep. Creditors cannot take these assets to satisfy your debts. In Michigan, debtors have the unique option to choose between Federal Exemptions or Michigan State Exemptions. Each set has distinct advantages depending on your specific assets, such as home equity or retirement accounts.
The Michigan Advantage
Michigan exemptions typically offer a much higher exemption for home equity, making it the preferred choice for many homeowners with significant equity.
The Federal Advantage
Federal exemptions include a "wildcard" provision (Section 522(d)(5)), which allows you to protect almost any type of property up to a certain dollar value.
Michigan Statutory Exemptions (MCL 600.5451)
Below is a summary of common property protected under Michigan law. Note that these amounts are periodically adjusted for inflation:
| Property Type | Exemption Limit (Approx) |
|---|---|
| Homestead (Primary Residence) | $30,000 / $45,000 (if 65+ or disabled) |
| Motor Vehicle | Up to $2,775.00 in value |
| Household Goods & Furniture | $450 per item / $3,000 aggregate |
| Tools of the Trade | Up to $2,000.00 |
| Retirement (IRA, Roth, 401k) | Fully Exempt (with minor exceptions) |
| Computer & Accessories | Up to $500.00 |
Strategic Planning
Choosing the wrong set of exemptions can result in the loss of property that could have otherwise been saved. Our attorneys analyze your assets to determine which path provides the maximum protection for your family.
Exemption Resources
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