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Livonia Michigan Bankruptcy

Michigan Bankruptcy Blog

“E” is for Exemptions in Bankruptcy

Posted by Peter Behrmann, Esq. On March 5th

Michigan Bankruruptcy Exemptions in Chapter 7 BankruptcyBankruptcy Exemptions Overview:

Bankruptcy offers you a fresh start if you’re overwhelmed by debt.  When you go through bankruptcy most of your debts are discharged quickly in a Chapter 7, or you pay them back with a payment you can afford in a Chapter 13.  However, when you file bankruptcy you may not be able to keep everything you own if is not covered by a bankruptcy exemption.  Basically, the Bankruptcy Code provides you with a list of property you will be able to protect and keep with exemptions when you file bankruptcy.  If the assets you own fit into a proper exemption, you will keep the asset when you file bankruptcy.  If the assets you own are not covered by an exemption, the bankruptcy trustee could liquidate the asset for the benefit of your creditors.


Bankruptcy Exemptions Choices:


For most people who file bankruptcy in Michigan, we have two choices of exemptions, state or federal.  For the most part, the state exemptions are a poor decision in Michigan.   I almost always use the federal exemptions for my clients. 


The Federal Bankruptcy Exemptions:

The federal exemptions allow my clients to keep the following assets:

  • $21,625 worth of equity in your primary home ($43,250 for a home owned jointly by a husband and wife)
  • $3,450 of equity in a vehicle
  • $11,525 of household goods and furnishings
  • $1,450 worth of Jewelry
  • $1,150 of any property (Cash, equity in a car over the exemption above, etc.)  plus up to $10,825 of any unused amount of the exemption for equity in your home
  • $2,175 in assets needed for your work or profession
  • Term Life insurance policies
  • $11,525 in cash value in Whole life insurance policies
  • Professionally prescribed health aids
  • Social security benefit, unemployment compensation, or a local public assistance benefit, veterans’ benefit, disability, illness, or unemployment benefit, alimony, support, or separate maintenance payments
  • Some payments under a stock bonus, pension, profit-sharing, annuity, or similar plans
  • IRA and 401k retirement funds

*This list is not a complete list, a complete list of the Federal Exemptions are available here.

As you can see the exemptions available are pretty generous.  I once filed a bankruptcy for a married couple with $20,000.00 in a bank account and they were able to keep every cent.  The best advice I can give you is to make your bankruptcy attorney aware of every asset you own so it can be protected by the proper exemption.


Chapter 7, Chapter 13 Bankruptcy is all I do!


Peter Behrmann is a Michigan bankruptcy attorney. From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy.


Photo Credit:  TooFarNorth


Other Bankruptcy Attorneys Blogging on the Letter “E”:


  • Early Preparation – Jacksonville Bankruptcy Lawyer, Monica D. Shepard
  • Eligibility – Philadelphia Bankruptcy Attorney, Kimberly Coleman
  • Emergency Filing – Colorado Springs Bankruptcy Attorney Bob Doig
  • Emergency Fund – San Francisco Bankruptcy Attorney, Jeena Cho
  • Equitable Distribution -Miami Bankruptcy lawyer, Dorota Trzeciecka
  • Equity – Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
  • Equity – Marin County Bankruptcy Attorney, Catherine Eranthe
  • Euphoria – Cleveland Area Bankruptcy Lawyer Bill Balena
  • Everything – Daniel J. Winter, Chicago Bankruptcy Attorney
  • Eviction – Philadelphia Suburban Bankruptcy Lawyer, Chris Carr
  • Examination – Los Angeles Bankruptcy Attorney, Mark J. Markus
  • Exceptions to Discharge – Wisconsin Bankruptcy Lawyer, Bret Nason
  • Executory Contract – New York Bankruptcy Lawyer, Jay S. Fleischman
  • Exemptions -Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell
  • Exemptions – Northern California Bankruptcy Lawyer, Cathy Moran Exemptions – Hilo Bankruptcy Attorney, Stuart Ing          
  • Exemptions – Downriver, Michigan Bankruptcy Attorney, Christopher McAvoy
  • Exemptions – Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein
  • Emotion – Los Angeles Bankruptcy Law Monitor, Christine A. Wilton