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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

  • 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

  • Tom Hensel is definitely the right attorney to call!

    “I was referred to Tom Hensel by a friend. My first impression was not only was Tom professional but he's so kind and caring too. He helped my husband and I through an embarrassing, scary situation and definitely made it more positive one. He guided us through our options and helped us make the right decision for us which ended up being a chapter 7 bankruptcy. Tom was so knowledgeable and helped us throughout the whole process. He never once made us feel uncomfortable or dumb when we had questions. He was also very easy to get a hold of when questions would come up and would always return our calls and emails promptly. I strongly recommend Tom to anyone going through this kind of financial nightmare. Do yourselves a favor and call him right away. He will help you get on the right path again. Our only mistake was waiting so long to call him!! When we in court waiting our turn all the other attorneys referred to their clients as "The debtors" Tom on the other hand acknowledged us by our names. Little things mean a lot and that left a lasting impression with us. Tom Thank You again for all your help!!”

    Stacy S.

  • 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

  • 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

  • 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