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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 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

Don't Wait! Contact Our 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 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

  • Tom was the most professional.

    “I researched 3 attorneys before signing with the Hensel Law Office for my bankruptcy proceedings. Tom was the most professional and he explained all of my questions without trying to make a quick buck on me. I would recommend Hensel Law Office to my friends or family going through a similar difficult situation.”

    Jerry

  • Utmost dedication and professionalism.

    “I chose to work with Tom Hensel after meeting with several big name firms in the area. Tom handled my unique situation with the utmost dedication and professionalism. The personal service I received from him made all the difference in my case. My only regret is that I didn't call him first.”

    Craig

  • 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

  • Mr. Hensel walked me through every step.

    “I would highly recommend the Hensel Law Office!! Mr. Hensel walked me through every step, got my garnishments stopped very quickly (even got garnished wages returned to me!) and told me what to expect along the way. He answered all of my questions in a very timely manner- no matter what time I sent an email or gave him a phone call. Also, I felt his price was very reasonable compared to some of the other places that I called. Mr. Hensel answered plenty of questions that I had before I even became a client.”

    Carl

  • 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