Michigan Bankruptcy Exemptions Updated

Michigan Bankruptcy Exemption Amounts Increased—And About Darn Time!

For the first time since 2011, the Michigan State Legislature has taken time to think about Michigan citizens in economic need and has updated some of the state statutory exemptions that used to help protect the property of those needing to file Chapter 7 bankruptcy.

Federal vs. Michigan Bankruptcy Exemptions: What's the Difference?

So what is an exemption? An "exemption" is just a piece of verbiage from either the (Federal) U.S. Bankruptcy Code or from one of a couple of different Michigan state statutes that, when applied, on paper, to a piece of property that you own in a bankruptcy petition "exempts" (removes) that property in full or in part according to its actual fair-market value from the "bankruptcy estate" that is created legally when a bankruptcy petition is filed and from which a Chapter 7 Trustee may seize and liquidate (sell off) property for the benefit of your creditors, who otherwise receive nothing on the debts that you owe them when the debts are discharged in bankruptcy. Whew. Still a long explanation, but, in short, exemptions are what protect your property from being taken from you in the Chapter 7 bankruptcy process. There is a set of Federal exemptions and a separate set of Michigan state exemptions. Michigan law allows you to choose between the two separate sets of exemptions. You cannot pick one exemption from one set and another from the other set. For reasons that an experienced bankruptcy attorney will explain to you at an initial consultation, the Federal exemptions are, in most cases, more beneficial than the Michigan exemptions. But not always. The decision of which set should be utilized in any specific case is one reason why you should always hire an experienced bankruptcy lawyer to assist you with your Chapter 7 process.

Which Michigan Bankruptcy Exemptions Have Changed?

So what's changed? Just a few and not by much, but every little bit helps. Listed below are the original values of the exemptions, the values as of 2011, and, in the right-most column, the new, current values. The household goods exemptions is still vastly better under the Federal exemptions, but the automobile exemption is now actually in-step with the Federal exemption. The home equity exemption at the bottom of the chart and a few other reasons not implicated by this set of revisions remain the primary reasons why the Michigan exemptions would ever be used at all.





















































































Type   of Property



Original Value



2011 Value



2014 Value




Per Item: household   goods, furniture, utensils, books, appliances, and jewelry













Aggregate Value: household goods, furniture, utensils, books, appliances,   and jewelry













Interest in a seat, pew, or slip   occupied by the debtor or the debtor's family in a house or place of public   worship.













crops, farm animals, and feed for   the farm animals.













Interest in household pets













Interest in 1 Motor Vehicle













Interest in 1 computer and its accessories













Tools or equipment of trade for business in which debtor is principally employed













Equity in primary residence













Equity in primary residence if disabled or   65+ years old












Michigan Bankruptcy Exemptions: The Bottom Line

The bottom line with regard to the exemptions is that, no matter which set you consider—you should not be considering the issue. Talk to an experienced Michigan bankruptcy attorney if you are considering filing for Chapter 7 or Chapter 13 bankruptcy (exemptions application is extremely important in even a Chapter 13 bankruptcy, in which no assets are liquidated at all). Engaging in "self-help" with regard to your assets (re-titling property, hiding it, transferring it) is the #1 way you can complicate what might otherwise be a straightforward Chapter 7 case in the hands of an experienced legal practitioner. If you are a Michigan resident and would like to explore your options for a Chapter 7 or Chapter 13 bankruptcy with an experienced Michigan bankruptcy attorney, please contact us at (866) 674-2317 or click the button below to schedule a free, initial consultation.

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If you enjoyed reading "Michigan Bankruptcy Exemptions Updated," please browse our other articles on our main Michigan Bankruptcy Blog.

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