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Michigan Property / Asset Exemptions

Will I lose all of my property if I file for bankruptcy?

Countless debtors have been deterred from even considering the possibility of filing for bankruptcy because they think that they will lose everything in the process. Numerous myths and misconceptions about bankruptcy have left people wondering what is and isn't true, so the bankruptcy lawyer at Hensel Law Office, PLLC would like to set the record straight. First and foremost, it is important to understand that you are protected by state and federal bankruptcy laws. This means that certain assets are exempt from consideration and/or inclusion in the bankruptcy process. As such, you can rest easier knowing that you will not be forced to forfeit your possessions in order to obtain relief from your unmanageable debt. Rather, you will be given the opportunity to keep your valuable assets safe.

Difference Between State & Federal Bankruptcy Exemptions

When filing for bankruptcy in Michigan, whether under Chapter 7 or Chapter 13, you will need to determine what type of exemption system you would like to claim. Since filers can choose to abide by state or federal bankruptcy exemptions, you must figure out which system is most accurately aligned with your best interests. For example, Michigan bankruptcy exemptions allow for you to protect up to $35,500 of your homestead's equity, while federal exemptions only protect a maximum of $22,975. In regard to other personal assets, however, federal exemptions may allow for a greater level of protection. For example, state exemptions protect the equity of your motor vehicle up to $3,250, while federal exemptions protect up to $3,675. As such, it is recommended that you make this decision under the guidance of an attorney.

Types of Property / Asset Exemptions in Michigan

If you have chosen to claim state bankruptcy exemptions, you will need to understand just how much of your property you will be able to protect. Since this process may require you to liquidate certain assets and use the proceeds to repay creditors, it is imperative that you are fully informed before making this decision. Under state laws, you would be able to protect the following assets:

Home / Condo Exemptions

  • Up to $35,500 in homestead equity would be protected
  • Up to $53,925 would be protected if over 65 or disabled

Motor Vehicle Exemptions

  • Up to $3,250 in equity would be protected for one vehicle

Personal Property Exemptions

  • Up to $3,525 would be protected for household goods
    • This includes furniture, appliances & jewelry
  • Up to $600 in equity would be protected for computer accessories
  • There is no limit on the amount of clothing that you can keep

Pension / Retirement Exemptions

  • Individual Retirement Accounts & Annuities are fully protected
  • $1,095,000,000 is protected for Traditional, Simple & Roth IRA's
  • Up to $5,475 is protected for Education IRA's

Wage Exemptions

  • The head of the household can protect up to 60% of earned wages
  • Other household members can protect up to 40% of earned wages

Insurance Exemptions

  • Insurance benefits are fully protected, regardless of the amount

Contact Our Michigan Bankruptcy Lawyer Today

If you have questions about whether to claim state or federal bankruptcy exemptions, it is imperative that you discuss your case with a Michigan bankruptcy attorney at Hensel Law Office, PLLC. Our firm has been assisting the residents of Sterling Heights and all surrounding areas for several years, so you can trust that your case is in competent hands when you come to us for help.

Call our office today at (888) 258-0651 to take advantage of a free initial consultation.

Client Testimonials

  • Professional, competent, empathetic attorney.

    “My husband and I were forced into a position to file for Chapter 7 bankruptcy. We were devastated and mortified that we had to choose that route, but Tom eased our stress about the filing and court hearing process, as he thoroughly explained what Chapter 7 entails, as well as exactly what to expect during and after the filing process; he was accurate on each point that he advised us on. Tom also kept in frequent contact with us and responded quickly to any questions or concerns that we had while we worked with him. Tom's expertise and tact was invaluable for us, and we will absolutely recommend him to any of our friends and relatives that may find themselves in similar positions to ours. Thank you, Tom, for your dedicated help during this process.”

    EJO

  • He is respectful and down to earth with his approach to very complicated legal matters.

    “Hensel Law Office has helped me during a very difficult time in my life. Tom has done a wonderful job with my Chapter 13 case. He always kept in touch with me and explained everything in terms I could understand. I would highly recommend Mr. Hensel to anyone who is facing any bankruptcy filing. He is respectful and down to earth with his approach to very complicated legal matters.”

    Sandra

  • We have and will continue to recommend you to others in need of a fresh start.

    “Dear Tom, my husband and I wanted to express our deepest thanks for the help you gave us during our embarrassing and stressful time. I was very impressed that you returned every phone call in a timely manner. You were able to explain exactly what was going to happen in words that "we" could understand. You answered every question we threw at you. The whole bankruptcy process from start to finish was complete in the time you told us it would take. Your professionalism yet friendliness made the whole experience for us almost enjoyable... almost! We have and will continue to recommend you to others in need of a fresh start.”

    Melissa

  • Thank you very much for getting us through this very hard time in our lives.

    “I just wanted to thank you very much, for getting us through this very hard time in our lives. You did an excellent job. If anyone I know is in need of a lawyer, we will surely give them your name. Again thanks.”

    John and Linda

  • He always responded quickly and intelligently.

    “Mr. Hensel made a difficult and uncomfortable situation as easy as possible for me. He always responded quickly and intelligently to my questions and never made me feel as if I were bothering him. He explained the unknown aspects of bankruptcy, the court system, and my options in clearly understandable terms. I felt confident that he was handling my case in the best possible manner and in my best possible interests. I feel lucky to have found the Hensel Law Office and I never hesitate to refer others who could use assistance - because I know they will get superior service and help.”

    Kelly