Many people struggling with debt don't know where to turn when the times get tough. Filing for bankruptcy can help alleviate the burden many debtors feel, but many individuals are concerned that they will lose everything they own after filing for bankruptcy.
Despite this common concern among consumers in Michigan, federal and state laws do protect many different types of property from liquidation in Chapter 7 bankruptcy filings. Bankruptcy exemptions can help consumers keep many of their possessions, but it is important for consumers to know the basics of what is exempt in Chapter 7 bankruptcy cases.
What are the bankruptcy exemptions that consumers to should know about? Federal and Michigan laws allow certain items and property to be exempt in Chapter 7 bankruptcy cases. Below is a list of the most beneficial exemptions for debtors in Michigan to know about:
- Homestead exemption: up to $35,300 of equity in real property is exempted. This increases to $52,925 of equity for individuals who are disabled or is 65 or older or if the filer has dependents that meet either of these qualifications.
- Cars worth up to $3,250.
- Household items like furniture and appliances up to $3,525.
- Tools or items necessary for the filer's occupation up to $2,350.
- Family pictures, clothing except furs and retirement accounts are exempted with no value limits. Contributions to retirement accounts made within 120 days before the bankruptcy filing are not exempted.
This is just a list of the most beneficial exemptions to know about under Michigan bankruptcy laws. Our article on Michigan bankruptcy exemptions discusses exemptions more in-depth and provides more information on filing for Chapter 7 bankruptcy.
If you feel like you are drowning in debt, you may want to consider filing for Chapter 7 bankruptcy. Struggling every day with collection notices and phone calls is no way to live. Chapter 7 bankruptcy can change your financial situation and give you an opportunity for a fresh start.