In the state of Michigan, those who are looking into bankruptcy will want to evaluate the exemptions that are available to them. There are many Michigan bankruptcy exemptions that consumers can take advantage of whenever they are looking to either file Chapter 7 bankruptcy or Chapter 13 bankruptcy. In either case, individuals can ensure that they keep essential property while looking to restructure their finances while living in the state of Michigan.
Exemptions in Michigan
With these options available, consumers will be able to get a fresh start with their finances by using the Michigan bankruptcy exemptions to their advantage.
Homestead Exemption
Motor Vehicles
Household Goods and Personal Property
Pension and Retirement Accounts
Wages
Tools of Your Trade
Insurance Benefits
Public Benefits
Exemption #1: Homestead Exemption
One of the exemptions that you can take advantage of in Michigan is the homestead exemption. In the state of Michigan, individuals can claim an exemption on their home as long as it has total equity of $40,475 or less. If you are disabled or 65 years of age or older, the exemption is increased to $60.725. Surviving spouses of the homeowner are able to claim this exemption as well.
Exemption #2: Motor Vehicles
Residents in Michigan are able to take advantage of the motor vehicle exemption. This particular exemption allows a person to claim up to $3,725 in equity on any vehicle they own. This exemption is essential for anyone who is looking to avoid selling or giving up their vehicles to satisfy a debt and get a Chapter 7 bankruptcy.
Exemption #3: Household Goods And Personal Property
Another exemption in Michigan to consider is one that entails your personal property and household goods. Things such as furniture, utensils, books, appliances, and jewelry valued up to $625 per item are exempt. You can claim all household goods as long as the value is $4,050 or less. When looking to claim this exemption, there are limits on other items such as clothing, crops, pets, and electronics. The total amount you can claim ranges between $700 for clothing and $2,700 for farm animals.
Exemption #4: Pension and Retirement Accounts
In the state of Michigan, a majority of pension and retirement accounts are protected. Individual retirement accounts and annuities are fully protected in a bankruptcy case. You will also be able to protect profit-sharing plans and stock bonus plans that are contributed within 120 days of filing for bankruptcy. IRA accounts and retirement plans like 401(k)s are protected up to a certain amount as well.
Exemption #5: Wages
Anyone who earns wages in the state can also claim an exemption. As of right now, up to 60% of your unpaid wages for the head of household can be claimed in bankruptcy. You can also claim up to $15 per week and $2 per week for each dependent other than a spouse. Anyone else can claim up to 40% or $10 per week.
Exemption #6: Tools of your trade
A person who works in the trades such as plumbing or construction can claim up to $2700 worth of tools, materials, and any other items needed to work in their occupation or business in the state of Michigan.
Exemption #7: Insurance Benefits
All insurance benefits are fully protected in the state. The benefits can be up to any amount from employer-sponsored benefits, stock benefits, mutual life, casualty, and health insurance policies.
Exemption #8: Public Benefits
You can also claim public benefits in the state of Michigan. Benefits such as unemployment compensation, crime victims’ compensation, veteran’s benefits, worker’s compensation, and welfare benefits can also be claimed when filing bankruptcy in Michigan.
To learn more about bankruptcy exemptions in Michigan, Moran Law is here to help. Our team of experienced Michigan bankruptcy attorneys can help you file today for a better financial future.
