Bankruptcy Exemptions in Michigan

In Michigan, the bankruptcy laws allow you to choose between the Michigan state exemptions or the federal exemptions when filing bankruptcy.   Because you are given the option to use either exemptions list, it is important to know what the different exemptions are on each list. 

Depending on what assets are more valuable in your situation, you can decide if the state or federal exemptions list is better for you.  Only one list of exemptions may be used and you cannot select exemptions from both lists for your Chapter 7 bankruptcy filing.

How to Keep Your Car

Exemption amounts for motor vehicles according to the Michigan state exemptions are very similar to those held by the federal government, so there is not a huge difference between the two options.

• The Michigan state exemptions allow for a motor vehicle value of up to $3,175.
• The federal bankruptcy exemption for a motor vehicle is for a value of up to $3,225.

How to Keep Your Home

There is a large deference between the state and federal exemption amounts when it comes to the homestead exemption, with the federal exemption being much greater.

• Michigan state homestead exemptions, condominiums included, allow for retention of homes that are valued up to $3,500 as long as they are located on only 1 lot in a town, city or village or up to 40 acres somewhere else
• A home owned by a deceased parent or spouse can be claimed under the homestead exemption by the spouse or child
• Tenancy property may be exempt from debts that are owned by one spouse
• The federal homestead exemption allows for a home to be kept up to the valued amount of $20,200

Filing Schedule C of a Bankruptcy Petition

Whether you determine that the Michigan state exemptions or the federal exemptions offer the best coverage while filing for bankruptcy, you will need to fill out a schedule C form with your bankruptcy petition.  The form must include a brief legal description of the exempt assets and the statute numbers that relate to the exemptions being sought.  Schedule C forms can be confusing and they must be filled out accurately for the exemptions to be applied.

Getting Legal Help

Filing bankruptcy is a challenging process and protecting your valuable assets can be even more stressful, but a knowledgeable bankruptcy attorney can help ensure that everything goes smoothly.  An attorney can assist in filling out forms and guide you through the bankruptcy laws so that your valuable assets are protected under the exemption laws.