MICHIGAN BANKRUPTCY LAW

Michigan Bankruptcy: Attorneys, Statistics, Exemptions and Courts.

Michigan Bankruptcy Statistics: In 2009, in Michigan, 69,346 bankruptcies were filed. Business Bankruptcies accounted for 2,081 of the total or only 3% of bankruptcies, the other 97% were personal bankruptcies.

Michigan State Bankruptcy Exemptions

Homestead

In Michigan there is no specific exception for a debtor’s home (“homestead”). However, if married couples own their home as a tenancy by the entirety and only one of the spouses is the debtor, the home may be exempt.

Personal Property

The following items are exempt in their entirety:

1. Health aids prescribed by a health professional
2. Burial plots or cemeteries
3. Clothing and family pictures
4. Food and fuel for the whole family for a period of six months following bankruptcy
5. Arms and accouterments required by law to be kept by debtor

The following items are exempt up to $475 per item or for a total of $3,200:

1. Household goods
2. Furniture
3. Appliances
4. Utensils
5. Books

The following items are exempt subject to limitations:

1. Pews, slips, or seats in a church for the entire family valued up to $525
2. Animals, feed, and crops valued up to $2,125
3. Household pets valued up to $525
4. Motor vehicle – only a single car can be exempt up to $2,950
5. Computer and accessories valued up to $525
6. Building and loan association shares valued up to $1,075, further limited by whatever is left over from the homestead exemption.

Insurance

In Michigan, the following insurance policies are exempt in their entirety:

1. Life insurance policy or trust fund sponsored by an employer
2. Life insurance
3. Life, endowment, or annuity proceeds, if there is valid clause prohibiting the payment of proceeds to beneficiary’s creditors
4. Fraternal benefit society benefits
5. Health, disability, or mutual life benefits

Pension

Federal pension exemptions apply in Michigan.

IRAs, Roth IRAs and ERISA-qualified pensions are exempt with one limitation: The contributions made within 120 days of filing bankruptcy in Michigan are not exempt.

The following individuals’ and their survivors’ benefits are exempt:

1. State employees
2. Firefighters and police officers
3. Legislators
4. Public school employees
5. Judges
6. Probate judges

Public Benefits

The following public benefits are exempt in their entirety when filing for bankruptcy in Michigan:

1. Crime victims' compensation benefits
2. Veterans' benefits for WWII veterans, Korean Veterans, Vietnam veterans.
3. Social welfare benefits
4. Workers' compensation benefits
5. Unemployment compensation benefits

Tools of the Trade

Motor vehicles, tools, implements, materials, apparatus, stock, team, horse and harness are exempt for a total of $1,000.

Wages

Unpaid wages are exempt at 60% of the weekly earnings, but not less than $15 per week. Additional $2 per week is exempt for each non-spouse dependent.

Miscellaneous

When filing for bankruptcy in Michigan, property belonging to a business where the debtor is a partner is exempt.

Wildcard: No

Federal Bankruptcy Exemptions: Yes

Michigan Bankruptcy Courts:

United States Bankruptcy Court in the Eastern District of Michigan has jurisdiction in the following counties: Alcona, Alpena, Arenac, Bay, Cheboygan, Clare, Crawford, Genesee , Gladwin, Gratiot, Huron, Iosco, Isabella, Jackson, Lapeer, Lenawee, Livingston, Macomb, Midland, Monroe, Montgomery, Oakland, Ogemaw, Oscoda, Otsego, Presque Isle, Roscommon, Saginaw, Saint Clair, Sanilac, Shiawassee, Tuscola, Washtenaw, Wayne.

United States Bankruptcy Court in the Western District of Michigan has jurisdiction in the following counties: Alger, Allegan, Antrim, Baraga, Barry, Benzie, Berrien, Branch, Calhoun, Cass, Charlevoix, Chippewa, Clinton, Delta, Dickinson, Eaton, Emmet, Gogebic, Grand Traverse, Hillsdale, Houghton, Ingham, Ionia, Iron, Kalamazoo, Kalkaska, Kent, Keweenaw, Lake, Leelanau, Luce, Mackinac, Manistee, Marquette, Mason, Mecosta, Menominee, Missaukee, Montcalm, Muskegon, Newaygo, Oceana, Ontonagon, Osceola, Ottawa, Saint Joseph, Schoolcraft, Van Buren, Wexford.