Table of Contents
  1. Michigan Bankruptcy Exemptions
  2. Will I be able to afford bankruptcy?

When you think of Michigan, you probably think about cars, or Detroit. That’s because Detroit is the car capital of the world. It’s home to the first air-conditioned car, manufactured in 1939 by the Packard Motor Company.

University of Michigan is also the first university to be established by any of the states, as well as the first land-grant university, Michigan State. Michigan also has the most shoreline out of any state except Alaska.

See also: Passing the Means Test Can Still Mean Chapter 7 Dismissal

Michigan Bankruptcy Exemptions

In Michigan, debtors can choose between the state or federal exemptions. Generally speaking, most debtors will elect to utilize Michigan bankruptcy laws because they allow more property to be protected. Michigan Compiled Laws 600.5451.

Below are a few of the most popular bankruptcy exemptions if you choose to file using Michigan’s system.

Michigan vs. Federal Exemptions

The top 5 exemptions under Michigan law compared to federal law.
Type of exemptionMichigan lawFederal law
Homestead$40,475; $60,725 if over 65 years old or disabled$27,900
Personal property$3,825 total in household goods, furnishings, appliances, jewelry ($600 per item), and computer equipment ($650)$12,625 aggregate value on household goods, plus federal wildcard exemption applicable ($1,250 plus $11,850 of any unused portion of your homestead exemption)
Wages60% of earned but unpaid wages for head of household; 40% for othersIncome you've earned but not yet received becomes part of your bankruptcy estate
Pension/retirementMost exempt, except contributions made within 120 days of filing for bankruptcy to individual IRAs and pensionsExempt, with a cap of about $1.28 million on IRAs and Roth IRAs


Under the Michigan exemption system, each homeowner and his or her dependents may exempt up to $38,225 of his or her interest in his or her home or other property covered by the homestead exemption. If the homeowner is age 65 or older or is disabled, the exemption amount is $57,350 (a surviving spouse can claim this, as well). Married couples are not permitted to double the homestead exemption, though they are permitted to double most other exemptions.


Michigan also allows debtors to protect up to $3,525 of equity in a car, up to just one vehicle.

Personal Property

A total value of $3,825 in personal property may be exempt under Michigan bankruptcy law. This includes household goods such as furniture, clothing, appliances, and books. Jewelry, up to $600 per item, is also included, along with $650 in computer equipment.


Debtors can protect up to 60% of earned but unpaid wages for head of household, or $15 per week plus $2 for each dependent aside from the spouse. Others can protect 40% of earned but unpaid wages, or $10 per week.

Retirement/pension benefits

These are mostly fully protected, with the exception of the amounts in IRAs and pension or profit-sharing plans that are contributed within 120 days of filing bankruptcy. Education IRAs are protected up to $6,425; traditional, simple, or Roth IRAs are protected up to $1.28 million.

The above figures are adjusted every three years. It should also be noted that on Feb. 24, 2011, the Sixth Circuit Bankruptcy Appellate Panel found Michigan’s bankruptcy-only exemptions to be unconstitutional. There is a state of flux within the law, making it all the more important to consult a Michigan bankruptcy attorney if you’re considering filing for bankruptcy.

Will I be able to afford bankruptcy?

Michigan’s economy has been among the hardest hit in the country and even those facing severe financial distress are often concerned that they won’t be able to afford a bankruptcy attorney. While the cost of bankruptcy can be high, especially for families who are struggling to get by, most bankruptcy law firms offer flexible payment options for their clients.

To file Chapter 7 bankruptcy in Michigan, the average attorney fee in the Detroit area is approximately $1,000 to $1,300. This won’t include the filing fee, which was recently raised to $335.

The cost to file Chapter 13 bankruptcy is higher then Chapter 7, but attorneys are often willing to accept payment of their fee through the Chapter 13 plan. Detroit bankruptcy attorney Pat Wilson says Chapter 13 fees vary by complexity, but start at around $2,500. The filing fee, meanwhile, for Chapter 13 bankruptcy is $310 — this is uniform nationwide.

If you find yourself struggling with debt and are curious about what bankruptcy may be able to do for your finances, contact an attorney. Most offer free consultations and will work with you to make the process affordable.

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