Many people fear that they will lose everything if they file a bankruptcy.  This is not the reality.  Certain property is considered exempt under the Bankruptcy Code, meaning it cannot be liquidated by the trustee.  The type of property and the limits for the value that can be exempted depends on a variety of factors, including whether you are taking the state exemptions or the federal exemptions.  An experienced bankruptcy attorney can assist you in determining what exemptions to use, and how it will impact the property you will have when you get your fresh-start.


Some states do not permit you to choose; you simply have to use the state exemptions.  Michigan allows debtors to choose between the state exemptions and the federal exemptions, which allows flexibility and permits some amount of exemption planning prior to bankruptcy.  There are some benefits to each exemption structure, but they cannot be combined.  Michigan exemptions may allow you to protect the entire value of your home if it is jointly owned with your spouse.  If you need that protection, you cannot then choose to take the higher federal exemption for household goods and furnishings.  You can use one set of exemptions or the other.

The federal exemptions also offer what is referred to as a “wildcard” exemption; it can be used for virtually anything.  If you have assets of one type that exceed the exemption limit for that type of property, the wildcard may be available to protect that additional equity in the property, and keep it out of reach of the trustee.

Both the federal and state exemptions increase from time to time. Speaking with a bankruptcy attorney will help you to determine how much of your property can be protected if you decide to file for bankruptcy protection.  In many cases, you will be able to protect everything you own.  Contact our office to set an appointment to discuss how your circumstances are impacted by the changes in the bankruptcy exemptions, and to determine the best path for you.



Have questions? Check out our FAQ's

Will bankruptcy stop Lawsuits?

Can I keep my 401k?

When do I need to file for bankruptcy?

How do I rebuild my credit?

Will I lose my house or car?


Our Focus

We represent businesses and owners anticipating or experiencing financial distress.

Approach to Law

We counsel clients so that their resources and assets are marshaled for corporate and individual protection.

Learn More