Michigan Bankruptcy Exemptions

If you are a resident of the state of Michigan and have been declared as bankrupt, you have the option to use either Michigan bankruptcy exemptions or federal set of exemptions. If you choose to go for the state-specific exemptions, you will also be able to us federal supplement exemptions additionally. It is important for you to understand that when you get a property exempted, the calculations are made on how much equity you have on that property, not on how much its current sale prices is. If the maximum amount exemptible is less than the actual sale price of a particular property, it is very much likely that your bankruptcy attorney will sell off that property and then will pay you the exemptible amount in cash; the remaining amount of money will be used in settlement of your debts that you owe to different creditors. However, in some cases, you may still be able to keep a property. For example, if you have some regular income sources and you give it in writing that you will continue to pay the monthly installments on your car, the court may allow you to keep your car, but you will have to file a separate motion in this regard.


Michigan bankruptcy exemptions are not allowed in the wildcard category.


If you are not the head of household, you will be able to exempt a minimum of forty percent of weekly unpaid wages, but the actual amount cannot be less than $10 per week in any case. On the other hand, if you are the head of household, you will be able to exempt a minimum of sixty percent of weekly unpaid wages, but the actual amount cannot be less than $15 per week; besides that, if there are some non-spouse dependent family members, you can get an additional $2 per week per member.

Tools Of Trade

A maximum of $1000 (aggregate total) can be exempted in harness, horse, team, stock, apparatus, materials, implements, tools, and motor vehicles – things that you need for your trade. Besides that, you can also keep accoutrements and arms up to an extent that is needed for trade.

Public Benefits

Michigan bankruptcy exemptions can be availed in full for certain types of public benefits, such as Unemployment compensation benefits, Workers’ compensation benefits, Social welfare benefits, Veterans’ benefits for Vietnam veterans, Veterans’ benefits for Korean War veterans, Veterans’ benefits for WWII veterans, and Crime victims’ compensation benefits.

Personal Property

Personal properties can be exempted as per the following provisions.

- A maximum of $1,075 of unused homestead exemption in building and loan association shares
- A maximum of $525 in computer and accessories
- A Maximum $2,950 of equity in one motor vehicle
- A maximum of $525 in household pets
- A maximum of $2,125 in crops, feeds and animals
- A maximum of $525 seats, slips and pews in a church for the entire family
- A maximum of $475 per item and $3,200 in aggregate total in books, utensils, appliances, furniture, and household goods.
- Fuel and food are also exemptible up to an amount that is reasonably needed to last for up to six months.
- 100% in family pictures, clothing, cemeteries, burial plots, and health aids prescribed by a professional health care provider.


Michigan bankruptcy exemptions can be availed in full for probate judge pensions, judge pensions, public school employee pensions, legislator pensions, firefighter and police pensions, state employee pensions, and federal employee pension. Besides that, if you have made the contributions over four months prior to filing the bankruptcy petition, you can also get 100% exemptions for ERISA qualified benefits, Roth IRAs, and IRAs.


100% of any property that belongs to business partnership


You can exempt 100% of the following insurance benefits –

- Mutual life benefits
- Disability and health benefits
- Fraternal benefit society benefits
- Annuity, endowment, or life proceeds (provided there is a clause in the policy agreement that the proceeds cannot be used to pay off debts of the policyholder)
- Life insurance
- Trust fund and life insurance policy sponsored by an employer


The exemptible property must not be larger than 40 acres in farms or larger than one lot in a city or town. The maximum equity that can be exempted in this category is $51,650 for those for married couples over 65 years of age and for disabled individual. In general, a married couple of a single individual can avail up to $34,450 of Michigan bankruptcy exemptions for homestead properties.

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One Response to “Michigan Bankruptcy Exemptions”

  1. Martin says:

    Very interesting and wonderful points. Michigan is the one of those few states, which allows its residents to choose from federal set of exemptions and state specific exemptions. If you are going to be declared bankrupt in the state of Michigan, you are lucky because you can use federal supplemental exemptions also with your selected option. Michigan State has its own rules regulations so it will be better to discuss your case with a good attorney of this particular field. Michigan not exempts any thing under wild card category. Wages can be exempted according to the prescribed percentage; it can differ from one family to the other. You can have the exemption in the category of tools of your trade, if you are taking some specific public benefits like unemployment compensation, social welfare etc. These benefits will be fully exempted in the state of Michigan and you can get the advantage of these benefits to lead your life smoothly even after bankruptcy. Personal property can be exempted under homestead category and you can get some exemptions for computer and accessories. Basically all these exemptions help you to start your new life with little bit extra finances.

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