Chapter 7 allows you to “wipe out” most of your debt. However, in the process of doing this, Chapter 7 also requires “liquidation.” This means that some of your property must be sold, and the money from the sale is used to pay back the debtor’s creditors.
Chapter 7 bankruptcy law in Michigan – and all other states – allows you to keep certain amounts and certain types of property. The property you can keep is called your “exempt” property.
Some of these “exemptions” are established by Federal Law – which means that they apply in every state.
Other “exemptions” vary from State to State. The best way to understand what property of yours will be exempt from sale under Bankruptcy law is to consult with an experienced, affordable bankruptcy lawyer in your state. We are experienced, affordable Michigan bankruptcy lawyers.
Chapter 7 Bankruptcy Exemptions
Below is a list of “exemptions” under Chapter 7 bankruptcy law in Michigan. Personal Property exempt from Chapter 7 Bankruptcy liquidation in Michigan includes:
- Clothing; household goods, furniture, jewelry, appliances, utensils and books up to $600 each or $3,775 total;
- Food and fuel to last six months;
- Family pictures;
- Prescribed health aids & medical equipment;
- Personal automobiles up to $3,475;
- Household pets worth up to $650;
- Crops, feed and animals up to $2,525;
- Computers and accessories up to $650;
- Burial plots, cemeteries and church pews;
- Tools of trade needed to carry on an occupation up to $2,525 total.
Chapter 7 Bankruptcy Pension Exemptions
Pensions exempt from Chapter 7 Bankruptcy liquidation in Michigan include:
Tax exempt retirement accounts; including 401(k)s; 403(b)s; profit-sharing & money purchase plans; SEPs; SIMPLE IRAs; defined benefit plans; IRAS and Roth IRAs to $1,245,475.
Also other pensions are exempt, including: firefighters; police officers; Judges; legislators; public school employees; and State employees.
Public Benefits, including: exempt from Chapter 7 Bankruptcy liquidation in Michigan includes:
Crime victims’ compensation; Vietnam veterans’ benefits; Veterans’ benefits for WWII veterans; Korean War veterans’ benefits; Social welfare benefits; Workers’ compensation; Unemployment compensation.
Chapter 7 Bankruptcy Insurance Exemptions
Insurance exempt from Chapter 7 Bankruptcy liquidation in Michigan includes:
Life insurance; Trust funds or life insurance policies that are employer-sponsored; life, annuity, or endowment proceeds if policy or contract prohibits use to pay creditors; fraternal benefit society benefits; disability, mutual life, or health benefits.
Best Detroit Bankruptcy Lawyers
The sooner you file bankruptcy, the sooner you stop garnishments, stop foreclosure actions, stop repossessions and start getting your life back on track. We never want you to delay filing bankruptcy and risk getting further in debt and/or losing your home or car. Call our caring and experienced Detroit Bankruptcy Lawyers today for a free consultation, so we can protect your property and provide the help you need.