Michigan Bankruptcy Exemptions
What property Michigan law lets you keep when you file. Most clients are surprised by how much is protected.
Exemptions are the heart of bankruptcy planning. Michigan has its own set of state exemptions that all Michigan filers must use. Below are the most commonly applied categories — these amounts are adjusted periodically by the legislature, so the specific dollar figures may shift.
| Property Type | Michigan Exemption Amount |
|---|---|
| Homestead (real property) | Up to $40,475 ($60,725 if 65+ or disabled) |
| Motor vehicle | Up to $3,725 in equity |
| Household goods & furnishings | Up to $3,775 total |
| Clothing | Unlimited |
| Tools of the trade | Up to $2,525 |
| Wages (last 4 weeks) | 60% (75% if head of household) |
| Pension / retirement accounts | Generally fully exempt |
| Wildcard | Up to $1,250 + any unused homestead |
How Much of Your Property Is Protected?
Drag the sliders to estimate what Michigan exemptions can shelter in your case.
Estimate only. Wildcard and unused homestead applied to cash automatically.
Federal vs. Michigan Exemptions
Some states let you choose between federal and state exemptions. Michigan does not — Michigan is an "opt-out" state, so all Michigan filers must use Michigan's exemption set. The trade-off is that Michigan's homestead exemption is more generous than the federal one, especially for older or disabled filers.
What Happens to Non-Exempt Property?
In Chapter 7, non-exempt property can be sold by the trustee, with the proceeds going to your creditors. In Chapter 13, you keep the property but must pay unsecured creditors at least the value of the non-exempt portion over the life of your plan. Most Robert Keyes Law clients have either no non-exempt assets or assets that fit within the wildcard exemption.
Worked Example: How Exemptions Apply in Practice
Take a typical Washtenaw County household — a couple in their late 40s filing jointly in Chapter 7. Here's how Michigan's exemption schedule maps onto a real balance sheet:
| Asset | Value | Exemption | Result |
|---|---|---|---|
| Home (after mortgage) | $32,000 equity | Homestead $40,475 | Fully protected |
| 2018 Honda Civic | $3,200 equity | Vehicle $3,725 | Fully protected |
| Household furniture | $2,800 | Goods $3,775 | Fully protected |
| 401(k) account | $87,000 | Retirement (full) | Fully protected |
| Checking + savings | $1,100 | Wildcard $1,250 | Fully protected |
| 2010 boat | $4,500 | — | Non-exempt — at risk |
In this scenario, Robert would discuss whether the boat is worth keeping (paying its non-exempt value into a Chapter 13 plan, or surrendering it in Chapter 7) before filing.
How Doubling Works for Married Couples
When spouses file jointly in Michigan, most exemption amounts double — each spouse claims their own. That means a joint filing protects up to $80,950 in homestead equity, $7,450 in vehicle equity (one car each), $5,050 in tools of the trade, and so on. This is one of the most overlooked planning advantages for married Washtenaw County homeowners with substantial home equity.
Timing Matters: Recent Asset Transfers
A common (and avoidable) mistake is moving assets right before filing — selling a car to a relative below market value, paying back a family loan, or transferring property into someone else's name. The trustee can review the prior 2 years of transfers (longer for transfers to "insiders" like family members) and undo them if they were made to defeat creditors. The fix is simple: talk to Robert before moving anything.
Exemption FAQs
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